The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Factor Price Equalization (Historical Trends)

  • Kevin H. O’Rourke
Reference work entry


The Heckscher–Ohlin prediction that international trade should lead to relative factor prices converging internationally is one that receives abundant empirical support for the period that was the focus of interest for these two economists, namely the ‘long nineteenth century’. In labour-abundant regions, wage–rental ratios increased, whereas they declined in land-abundant countries.


Factor price equalization Heckscher, E. F Heckscher–Ohlin trade theory Ohlin, B. G Skill-biased technical change Transportation costs Wage–rental ratio 

JEL Classification

C30 C31 C32 C33 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Kevin H. O’Rourke
    • 1
  1. 1.