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Traded Prices and Wages in the US: A Test of the Stolper-Samuelson Theorem
by
Cassandra Copeland
Oglethorpe University
Coauthors: Henry Thompson (Auburn University), John Wells (KPMG Peat Marwick)
This paper examines the time series evidence relating production wages and prices of traded goods in the US since 1964. Prices of imports, exports, and production wages are cointegrated. Improved terms of trade are associated with falling wages. In a short-term vector autoregressive model, wages are positively associated with import prices and negatively associated with export prices. Protection, however, would have only a small positive impact on production wages and would likely lower real wages.
Date received: September 22, 2005
Copyright © 2005 by the author(s). The author(s) of this document and the organizers of the conference have granted their consent to include this abstract in Atlas Conferences Inc. Document # caqt-82.