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Technical progress that takes place in one country is often soon transmitted to major trading partners, leading to adjustments in equilibrium commodity prices. This paper makes use of the twin concepts of differential industry effects and differential factor effects to ask about the role of each in determining how progress affects real wages. A simple diagram is utilized to illustrate in general settings the importance of factor bias in technology and the elasticity of substitution in demand in the analysis of real wage changes.
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Ronald W. Jones (2000) studied this question.
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