International Factor Movement and the National Advantage
A Comment
Bibliographic Data
| ID | 9727445 |
|---|---|
| Authors | L Roy Webb, Lawrence Webb (0000-0002-8691-1432, corresponding author) |
| Year | 1970 |
| Volume | 37 |
| Issue | 145 |
| Pages | 81 |
| Publication date | 1970-02-01 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | JSTOR (PUBLISHER) |
| DOI | 10.2307/2552004 |
| OpenAlex | W1997937257 |
| Language | EN |
| Citations received | 2 |
V. K. Ramaswami has recently shown that national income, inclusive of income earned abroad by factors of domestic origin, is to be maximized, optimal taxation of the import of the scarce factor is preferable to optimal restriction of the export of the abundant factor.2 The two-fold purpose of this note is to make explicit the general equilibrium analysis underlying Ramaswami's proposition, and to show that, while his policy recommendation is appropriate when a government is comparing the merits of acting as a monopolistic seller or monopsonistic buyer of factor services (a one-versus-many situation), it will not be the best policy where governments face each other in a bilateral bargaining situation. I do not refer here to the possibility of retaliatory action as that is understood in the literature on optimal tariffs-we shall follow Ramaswami in assuming no retaliation. The possibility to be discussed is one which, by analogy with ordinary monopoly analysis, arises when an all-or-nothing deal, as distinct from the conventional monopoly solution given by Ramaswami's formulae, is possible.3 Figure 1 is a production box diagram incorporating Ramaswami's assumptions. OM and OA are the origins of the identical production functions for Mancunia and Agraria respectively. Each country uses capital and labour to make the same good, subject to constant returns to scale and diminishing returns to varying factor proportions. The contract locus coincides with the diagonal OMOA The distribution of factor ownership between the countries is assumed to be at P: Mancunia is capital-rich and Agraria capital-poor. Under competitive conditions and in the absence of restrictions, factor
Aesthetics · Economics · Factor (programming language) · Movement (music) · Political science · Computer Science · Fiscal Policy and Economic Growth · Global Financial Crisis and Policies · Global trade and economics · Philosophy
| Unique citing works | 2 |
|---|---|
| Citations per year | 0,05 |
| Citation span | 1985 - 1994 (10) |
| Citation velocity | historical |
| Highly cited | No |
| Citation types | Neutral: 1 |