Factor price

About: Factor price is a research topic. Over the lifetime, 2764 publications have been published within this topic receiving 86176 citations.

Matching and Inequality in the World Economy

Abstract: This paper develops tools and techniques to study the impact of exogenous changes in factor supply and factor demand on factor allocation and factor prices in economies with a large number of goods and factors. The main results of our paper characterize sufficient conditions for robust monotone comparative statics predictions in a Roy-like assignment model. These general results are then used to generate new insights about the consequences of globalization.

The Effect of Multinational Firms' Operations on Their Domestic Employment

Abstract: Given the level of its production in the U.S., a firm that produces more abroad tends to have fewer employees in the U.S. and to pay slightly higher salaries and wages to them. The most likely explanation seems to be that the larger a firm's foreign production, the greater its ability to allocate the more labor-intensive and less skill-intensive portions of its activity to locations outside the United States. This relationship is stronger among manufacturing firms than among service industry firms, probably because services are less tradable than manufactured goods or components, and service industries may therefore be less able to break up the production process to take advantage of differences in factor prices.

A model of latent symmetry in cross price elasticities

Abstract: This paper develops the Latent Symmetric Elasticity Structure (LSES), a market share price elasticity model which allows elasticities to be decomposed into two components: a symmetric substitution index revealing the strength of competition between brand pairs, and a brand-specific coefficient revealing the overall impact of a brand on its competitors. An application of the model to unconstrained cross price elasticities shows that brand-price competition in one market is well-represented by a LSES model in which brand substitutability and elasticity asymmetry are related to average price level.

Price dispersion across and within countries: The case of Japan and Korea

Abstract: This paper analyzes the price difference between Japan and Korea by using goods-level consumer price data. The national border has a large effect on price dispersion in both time-series volatility analysis and cross-sectional difference analysis. By categorizing goods by their perishability, I find that absolute purchasing power parity (PPP) applies to a greater extent for durable goods. Although perishables deviate more from absolute PPP, the difference is due to distance. This implies that the source of price dispersion depends on the characteristics of goods. J. Japanese Int. Economies 21 (2) (2007) 237–259.

Getting to a competitive equilibrium

Abstract: In the previous paper Keisler (1995) we introduced a random price adjustment model for an exchange economy which is decentralized in that the trades permitted to an agent and the resulting price changes depend only on the commodity vector currently held by that agent, and not on the whole economy. Our model is an exchange economy with a finite set of commodities, a market maker who adjusts prices, a large finite set of agents who trade only with the market maker, and a parameter A ∈ (0,1) which determines the rate of price adjustment. Each agent has an initial endowment and a preference relation. At each discrete time, one agent is chosen at random and makes the trade which maximizes his preferences subject to the budget constraint at the current price vector. Then the market maker adjusts the price vector according to the following rule: if x is the change in the commodity vector of the agent who just traded, p is the old price, and α is the number of agents, then the new price is p + (α -λ )x. Thus both the price vector and the commodity allocation change randomly with time. We obtain asymptotic results as the number of agents goes to infinity, subject to stability assumptions on the price paths. It was shown in the earlier paper that with probability arbitrarily close to one the price path in our model will approximate the price path of the corresponding tâtonnement process on a rapid time scale, and will then remain close to a limit price. In this paper we show that, with probability arbitrarily close to one, the economy will approach a competitive equilibrium, and the process will be feasible in the sense that the market maker's inventory is approximately constant over time. Our main assumption is that the price adjustment rule is stable throughout the trading process. This is stronger than the classical tâtonnement assumption that the price adjustment rule is stable at the initial endowment. We show that many classical examples of exchange economies satisfy our assumptions, and then give an example where stability at the initial endowment holds but the stronger stability assumption needed for our results fails.