Specific Factor Model Workshop

1
Specific Factor Model Workshop

• Eco 324F

2
Steel wars

• Use the specific Factor model to analyse why US
  steelworkers and owners lobbied for stiff tariffs
  on foreign steel.
• Thousands of US steelworkers rallied near the
  White House yesterday, urging President George W
  Bush to impose stiff tariffs on foreign steel as
  Bush met with 19 congress members from
  steel-producing states to hear similar pleas.
  Bush said he was not going to bow to
  international or any other pressure said
  representative Robert Ehrlich. (Business Day,
  2002).

3
Welfare

• Past exam question
• International trade often has strong effects on
  the distribution of income within countries, so
  that it often produces losers as well as winners.
  
• Draw upon the specific factors model to discuss
  the welfare changes arising from the proposed
  free trade area between South Africa and the rest
  of SADC.
• Use the HO model to discuss the Long-Run impact
  on factor payments

4
Welfare

• A