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Factor Proportions Wages in a Structural Vector Autoregression

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  • Kim, Hyeongwoo
  • Thompson, Henry

Abstract

Factor proportions trade theory focuses on wage adjustments to product prices and factor endowments estimated directly for the first time in the present paper with a structural vector auto regression. Yearly data cover the US wage, labor force, fixed capital assets, and relative prices of services and manufactures from 1949 to 2006. This model with only capital and labor inputs is inconsistent with the evidence leading to the addition of energy input. Energy has a stronger wage impact than capital, labor is revealed as the middle factor in the intensity ranking, and results suggest a high degree of substitution.

Suggested Citation

  • Kim, Hyeongwoo & Thompson, Henry, 2009. "Factor Proportions Wages in a Structural Vector Autoregression," MPRA Paper 17798, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:17798
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    References listed on IDEAS

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    More about this item

    Keywords

    Wage; Factor Proportions; Structural Vector Autoregression; Impulse Response Functions;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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    This paper has been announced in the following NEP Reports:

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