In factor price
terms, Table 3, these factor content patterns imply that international trade tended to increase the real wage of workers with low qualifications and decrease the real wage of some groups of more highly qualified workers.
However, such a negative marginal product of capital is a violation of standard curvature conditions, and not only does this make factor price
efficiency impossible to calculate (since any root of a negative number is imaginary), it makes estimates of multifactor productivity suspect since the isoquant may be upward-sloping.
For this reason the four equations of (8), one for each year, are estimated in logarithms and ln(h([w.sub.i](t))) being a firm-specific time-varying unobservable, serves as the error term.(13) This solution to the problem of missing factor price
data was made possible by the assumption that the cost function was multiplicatively separable.
Overall Means of the Source Data per Bank 199 Holding Companies Independent Banks N 338 3,115 Outputs: Y1 1,520,451 40.63% 41,087 44.76% Y2 826,565 22.09% 5,771 6.29% Y3 837,755 22.38% 10,435 11.37% Y4 557,732 14.90% 34,499 37.58% SUM Y 3,742,503 91,792 COST 553,485 4,882 Unit Cost 0.1479 0.0532 Inputs: X1 2,376.02 42.02 X2 33,921.84 1,444.86 X3 17,614,677.55 131,931.84 Factor Prices
: P1 34.651 34.980 P2 0.560 0.526 P3 0.031 0.033 Notes: List of symbols: Y1 = real estate loans, Y2 = commercial and industrial loans, Y3 = consumer loans, Y4 = investment securities, X1 and P1 = labor and the factor price
, X2 and P2 = capital and the factor price
, X3 and P3 = borrowed funds and the factor price
While the analysis focuses on issues of labour adjustment associated with such convergence, it eclectically draws on the extensive literature, much of it recent, that has emerged in related areas: growth convergence and preconditions for growth; migration, resource rents and equalization payments; spatial convergence and the growth and decline of cities; neighbourhood effects and the social transmission of inequality; interjurisdictional competition for investment and jobs; and trade liberalization and factor price
Others identify global "factor price
equalization"--in an open global economy overseas workers with comparable skills but lower wages are forcing the wages of Americans down.
International trade is introduced and general equilibrium yields the factor price
Papers in the export zone literature have used models that assume local factor price
equilization whereas those on factor movements do not.(13) Recall, that local factor price
equilization means that factor rewards are determined by output prices independent of factor endowments.
Finally, the claim of factor price
equalization for all U.S.
Without technical progress, upland factor price
changes are determined entirely by commodity price changes.
Under the principles of what economists know as "factor price
equalization," in an open competitive world economy workers with equal skills must be treated equally.
This refers to the fact that the factor price
is equal to the DMRP and not just the MRP.