Economics Dictionary of ArgumentsHome
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| Heckscher-Ohlin Theorem: The Heckscher-Ohlin Theorem states that a country will export goods that intensively use the factors of production it has in relative abundance, and import goods that intensively use factors it is relatively scarce in. This explains patterns of international trade based on differences in countries' factor endowments (e.g., labor, capital) rather than just productivity. See also Heckscher-Ohlin model, Economic models, International trade._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Robert C. Feenstra on Heckscher-Ohlin Theorem - Dictionary of Arguments
Feenstra I 2-2 Heckscher-Ohlin Theorem/Feenstra: Each country will export the good that uses its abundant factor intensively. Thus, under our assumptions the home country will export good 1 and the foreign country will export good 2. To prove this, let us take a particular case of the factor endowment differences L / K > L* / K *, and assume that the labor endowments are identical in the two countries, L* = L, while the foreign capital endowments exceeds that at home, K* > K .* >Heckscher-Ohlin model. * Because of the assumptions of identical homothetic tastes and constant returns to scale, the result we are establishing remains valid if the labor endowments also differ across countries._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Feenstra I Robert C. Feenstra Advanced International Trade University of California, Davis and National Bureau of Economic Research 2002 |
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