Re: The Economy IS The Colateral Damage of War on Terrorism.

[Bruce McFarling <ecbm@xxxxxxxxxxxxxxxxxxx>]

On Sat, 08 Dec 2001 18:05:02 -0800, Rakesh Bhandari
<rakeshb@xxxxxxxxxxxx> wrote:

>  But this is calculated in labor values. There is no reason to
>assume that in terms of cost prices (c + v) and market prices
>(or prices of production, kr) English cloth has a comparative
>advantage over English wine. In fact it was easy to construct
>an example where this was easy to reverse in terms of cost prices
>and prices of production.

This seems to be accomplished by making production of one
product relatively capital intensive in one country and
relatively labour intensive in the other.

>MY COST PRICE SCHEME
>              Port               Eng
>Wine     70 (60c+10v)        75 (30c+45v)
>Cloth    60 (30c+30v)        80 (60c+20v)

        Port c:v    Eng c:v
Wine      6:1         2:3
Cloth     1:1         3:1

I was not previously aware of important industries
other than agriculture where there is this type of
reversal of factor intensities between different
countries.

Virtually,

Bruce McFarling, Shortland, NSW
ecbm@xxxxxxxxxxxxxxxxxxx