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Title: |
Factor Price Changes and Imported Intermediate
Goods |
| Author: |
Murphy, Brendan |
| Author
Affiliation: |
U W Ont |
| Source: |
International Economic Journal, Winter 1989, v. 3, no. 4, pp. 19-36 |
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Publication Date: |
Winter 1989 |
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Abstract: |
The paper presents a diagrammatic analysis
of the short-run and long-run effects of changes in the prices of
imported intermediate goods on domestic factor prices. The analysis
focuses on the role of the elasticities of substitution between imported
inputs and domestic factors in determining short-run changes in wage and
rental rates, and on the importance of the share of imports in the costs
of production in determining the long-run changes. The possibility that
all short-run changes in factor prices could be reversed in the long run
is illustrated. |
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