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Factor Mobility and International Trade.

Abstract:

This paper develops a two-country model of trade and factor mobility in which capital is sector-specific but internationally mobile. The model avoids the indeterminacy and propensity to specialize of Heckscher-Ohlin models and exhibits a rich variety of responses to exogenous shocks, including transfers, capital taxes, and tariffs. The results throw light on the relationship between goods and factor trade, reconciling the conflicting views of previous writers. It is argued that the model hold...

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Journal:
Canadian Journal of Economics
Volume:
28
Publication date:
1995
URN:
uuid:8fe8d0e1-ea4b-487f-857b-5c5d6138b4b8
Local pid:
oai:economics.ouls.ox.ac.uk:10373
Language:
English

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