Editing Factor price equalization (section)

==Application==
[[Joseph Stiglitz]] applied factor price equalization to a dynamic economy to study the long term supply responses of capital from the classical perspective. He showed that the high interest economy is eager to trade with the low interest rate economy, and consequently it has a lower long term consumption in [[free trade]] than pre-trade. He also demonstrated that in the long run [[tariff]] or export subsidy may increase the consumption per capita in those countries, providing a simple explanation for the results.<ref> {{cite journal 
| title = Factor Price Equalization in a Dynamic Economy 
| journal = Journal of Political Economy 
| volume = 78
| date = May 1970 
| vauthors = ((Stiglitz, J.)) 
| issue = 3 
| pages = 456–488 
| doi = 10.1086/259644 
}}
</ref>