ECON 4130 Lecture Notes - Lecture 2: Hiscox
17 Sep 2020
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Rogowski model: factors are mobile in the domestic economy. Class coalitions of labor, capital, and land are internally united on trade. Import-competing industries seek protection, and export industries want liberalization, even if both industries rely on the same factor such as land, labor, or capital broad class lines. With domestic factor immobility, political coalitions form along industry rather than. The rogowski (class) and ricardo-viner models (group) offer starkly different predictions, but both types of predictions have been empirically supported in a variety of contexts. Treat inter-industry factor mobility as a continuous variable. In short, higher factor mobility should lead to broad factor-owning class coalitions, and low factor mobility should lead to narrow industry-based coalitions. How can variation in factor mobility be measured. Measurements of the difference between rates of return for factors employed in different industries. Rate-of-return differentials (how much does salary change by switching industries)
