Search Encyclopedia

  • Search Full Site
  • Display Encyclopedia Entries
  • Display Encyclopedia Paragraphs
1 paragraph found in the 1 entry listed below
Paul Anthony Samuelson, David R. Henderson
1 paragraph found.

Swedish economist Bertil Ohlin had argued that international trade would tend to equalize the prices of factors of production. Trade between India and the United States, for example, would narrow wage-rate differentials between the two countries. Samuelson, using mathematical tools, showed the conditions under which the differentials would be driven to zero. The theorem he proved is called the factor price equalization theorem.