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Stolper–Samuelson Time Series: Long-Term US Wage Adjustment


  • Thanks for comments and suggestions go to Farhad Rassekh, Charles Sawyer, Roy Ruffin, Ron Jones, Manoj Atolia, Santanu Chaterjee and Svetlana Demidova.

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Factor prices adjust to product prices in the Stolper–Samuelson theorem of the factor proportions model. The present paper estimates adjustment in the average US wage to changes in prices of manufactures and services with yearly data from 1949 to 2006. Difference equation analysis is based directly on the comparative static factor proportions model. Factors of production are fixed capital assets and the labor force. Results have implications for theory and policy.