Summary of the Discussion
The discussion first dealt with the validity of the factor price equalisation theorem and the relation between commodity and factor movements. It also considered the assumption of identical production functions in different countries and the possibility of factor intensity reversals. Suggestions were made to extend the factor proportions model to incorporate growth in factor supplies, indivisibilities, discontinuous space and historical irreversibility. The discussion ended with some reflections on the purpose and the methodology of standard trade theory, in particular on the value of ‘simple’ models based on ‘unrealistic’ assumptions. This session was chaired by Charles P. Kindleberger.
KeywordsProduction Function Factor Price Trade Theory Guest Worker Factor Price Equalisation
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- 1.1 Haberler also discussed the effect of the growth of the public sector on the pattern of trade. He treats this topic now in Appendix B to his paper (pp. 15–16).Google Scholar