Econ 503 Week 5 notes
Econ 503 Week 5 notes ECON 503 001
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This 1 page Class Notes was uploaded by Tulsi on Sunday September 25, 2016. The Class Notes belongs to ECON 503 001 at University of South Carolina taught by William Hauk in Fall 2016. Since its upload, it has received 4 views. For similar materials see International Trade Economics in Economics at University of South Carolina.
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Date Created: 09/25/16
Week 5 Tuesday, September 20, 201:17 PM Migration: flows of people across international boundaries -will increase or decrease labor supply in a country Short run model: (specific factors) Long run model: Hecksher Olin Model Short run (specific factors model) Immigration--> Increase in labor supply results in fall in nominal/real wages Lm increases (labor in manufacturing goes up) La increases (labor in agriculture goes up) Km does not change (capital in manufacturing stays same) Na does not change (land in agriculture does not change) Lm/Km increases Marginal product of capital (MPKm) increases MPLm decreases rK/Pm increases (real return on capital increases) K /Pa increases La/Na increases MPNa increases MPLa decreases rN/Pa increases, N /Pm increases Mariel Boatlift of 1980 Heckscher Ohlin Box Diagram Long run effects of migration Kc/Lc stays the same Ks/Ls stays the same Kc and Lc fall Ks and Ls increases La/Na increase MPNa increase, MPLa decrease rN/Pa increases, N /Pm increases Computer industry (capital intensive) shrinks Rybczynski Theorem -computer industry shrinks (capital intensive) -shoe industry grows (labor intensive) Assume all assumptions of H-O model hold true, then when an economy's endowment of that factor of production increases, industries that use that factor intensively will grow and other industries will shrink Week 5 Page 1
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