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Comparative Advantage in International Trade

Theory and Evidence

  • Mirela Keuschnigg
Book
  • 968 Downloads

Part of the Studies in Empirical Economics book series (STUDEMP)

Table of contents

  1. Front Matter
    Pages i-viii
  2. Introduction

    1. Mirela Keuschnigg
      Pages 1-3
  3. Theory

    1. Front Matter
      Pages 5-5
    2. Mirela Keuschnigg
      Pages 7-11
    3. Mirela Keuschnigg
      Pages 13-20
    4. Mirela Keuschnigg
      Pages 21-33
    5. Mirela Keuschnigg
      Pages 35-51
    6. Mirela Keuschnigg
      Pages 53-53
  4. Evidence

    1. Front Matter
      Pages 55-55
    2. Mirela Keuschnigg
      Pages 57-59
    3. Mirela Keuschnigg
      Pages 61-79
    4. Mirela Keuschnigg
      Pages 81-138
    5. Mirela Keuschnigg
      Pages 139-142
  5. Back Matter
    Pages 143-164

About this book

Introduction

Traditional trade theory explains trade only by differences between countries, notably differences in their relative endowments of factors of production. It suggests an inverse relationship between the similarity of countries and the volume of trade between them. The Heckscher-Ohlin (HO) factor propor­ tions theory derives the determinants of comparative advantage in a world of "two-ness" (two goods, two factors, two countries). It predicts that each country will export that good which uses the country's abundant factor rel­ atively most intensively. The literature on trade offers an impressive number of studies based on the HO theory. The main methodological problems en­ countered in the literature are: first, the appropriate formulation of the HO theorem in a multi-factor, multi-good and multi-country framework; second, proper tests of the HO theory and proper links of the theory to empirical analysis. The relevance of the HO theory began to be questioned when important facts of modern international trade proved to be inconsistent with its theoretical framework. Leontief (1953) tested the factor proportions theory, using the US data for 1947, and found that the US had more labor-intensive exports than imports, which is opposed to both perceptions and estimations of factor endowments. The Leontief Pamdoxcreated doubt as to whether or not actual trade patterns and factor endowments are related as predicted by theory, and caused many controversial discussions with regard to the proper empirical implementation of the factor proportions theory.

Keywords

Außenwirtschaft Außenwirtschaftstheorie Heckscher-Ohlin-Theorie Heckscher-Ohlin-Theory Inernational Trade Internationaler Handel Trade Theory foreign trade

Authors and affiliations

  • Mirela Keuschnigg
    • 1
  1. 1.SaarbrückenGermany

Bibliographic information

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