Abstract
The paper presents a diagrammatic analysis of the short-run and long-run effects of changes in the prices of imported intermediated goods on domestic factor prices. The analysis focuses on the role of the elasticities of substitution between imported inputs and domestic factors in determining short-run changes in wage and rental rates, and on the importance of the share of imports in the costs of production in determining the long-run changes. The Possibility that all short-run changes in factor prices could be reversed in the long run is illustrated. [410]
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