国际经济学-克鲁格曼英文版课件-nobel08ch07.pptVIP

Chapter 7 International FactorMovements Preview International labor mobility International borrowing and lending Foreign direct investment and multinational firms Movements in Factors of Production Movements in factors of production include labor migration the transfer of financial assets through international borrowing and lending transactions of multinational corporations involving direct ownership of foreign firms Movements in Factors of Production (cont.) Like movements of goods and services (trade), movements of factors of production are politically sensitive and are often restricted. Restrictions on immigration Restrictions on financial asset flows (less common today in Europe and U.S.) Restrictions on the activities of multinational corporations International Labor Mobility To show the effects of labor migration (mobility), let’s build a simple model with only one composite good called output. Suppose that there are only two important factors of production: land and labor. On a fixed parcel of land, the productivity of workers eventually diminishes as each works more hours and as more workers produce on that fixed parcel of land. The marginal productivity of labor eventually decreases. Fig. 7-1: An Economy’s Production Function Fig. 7-2: The Marginal Product of Labor International Labor Mobility (cont.) The productivity of labor depends on the amount of work and number or workers. In competitive markets, firms can afford to pay only wages whose purchasing power equals the marginal productivity of the workers earning the wages. The area under the marginal product(ivity) of labor curve equals the value of output produced, which equals the value of wages and income paid to factors of production when markets are competitive. International Labor Mobility (cont.) If the domestic country is a labor abundant country and the foreign country is a land abundant country, the marginal productivity of domestic workers is less and they therefore are predicted to earn