Given identical technologies across countries, run the program “sign_rank_1.do” to conduct the…

Given identical technologies across countries, run the program “sign_rank_1.do” to conduct the sign test, rank test, and test for missing trade. Use the results in “sign_rank_1.log” to replicate columns (2) and (4) in Table 2.5.

Given uniform technological differences across countries, run the program “sign_rank_2.do” to…

Given uniform technological differences across countries, run the program “sign_rank_2.do” to redo the sign test, rank test, and missing trade. Use the results in “sign_rank_2.log” to replicate column (3) and (5), given column (6) in Table 2.5.

Allowing all factors in each country to have different productivities, now run the program…

Allowing all factors in each country to have different productivities, now run the program “compute_pi.do” to compute factor productivities  as Trefler (1993). Note that there are 9 factors in the original data set, but these are now aggregated to just 4 factors, which are labor (endowment 1), capital (endowment 2), cropland (endowment 3) and pasture … Continue reading "Allowing all factors in each country to have different productivities, now run the program…"

In the sector-specific model, suppose that the home and foreign countries have identical labor…

In the sector-specific model, suppose that the home and foreign countries have identical labor and capital in sector 2, but the home country has more capital in sector 1. Technologies and tastes are the same across countries. (a) Can we predict the trade pattern between the countries? What factor(s) at home benefit from the opening … Continue reading "In the sector-specific model, suppose that the home and foreign countries have identical labor…"

Consider the translog GDP function lnG(p,V) in (3.15). ‘ (a) Show that G(p,V) is homogeneous of…

Consider the translog GDP function lnG(p,V) in (3.15). ‘ (a) Show that G(p,V) is homogeneous of degree one in prices when (3.16) and γij = γji hold. (b) Show that G(p,V) is homogeneous of degree one in endowments when (3.17) and δkℓ = δℓk hold.

Suppose that there are two outputs – non traded good 1 and traded good 2 – and three inputs –…

Suppose that there are two outputs – non traded good 1 and traded good 2 – and three inputs – labor, capital, and imported inputs. Assume that the cost share of labor is higher in good 1 and the cost share of capital is higher in good 2. The prices of both outputs are treated … Continue reading "Suppose that there are two outputs – non traded good 1 and traded good 2 – and three inputs –…"

In this question we will examine the aggregate demand curve for labor that arises in autarky, and…

In this question we will examine the aggregate demand curve for labor that arises in autarky, and under free trade. Make all the usual assumptions of the 2×2 economy. (a) First consider the autarky economy, where there is a single representative consumer in the country, and the prices for the goods are determined by supply … Continue reading "In this question we will examine the aggregate demand curve for labor that arises in autarky, and…"

Consider an economy with two industries and three factors – unskilled labor (L), skilled labor…

Consider an economy with two industries and three factors – unskilled labor (L), skilled labor (H) and capital (K). (a) Suppose that industry one has a higher cost share of unskilled labor and also of capital (think of factory production). Suppose further than the product prices are constant, but that the rental on capital goes … Continue reading "Consider an economy with two industries and three factors – unskilled labor (L), skilled labor…"