Abstract
While establishing the validity of the Heckscher-Ohlin (H.O.) proposition in the presence of risk-averse behaviour by producers, we introduced a number of assumptions in addition to those which are usually maintained for this type of analysis. It is high time that we justify these assumptions, which required α, its probability distribution, and the producers’ attitudes towards risk to be the same in both countries. Our defence, of course, is the fact that without these assumptions the H.O. theorem may not hold in our stochastic model.
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References
Batra, R. N., Studies in the Pure Theory of International Trade( London: Macmillan, 1973 ).
Hicks, J. R., The Theory of Wages( London: Macmillan, 1932 ).
Johnson, H. G., International Trade and Economic Growth(Cambridge, Mass.: Harvard University Press, 1967) chap. 1.
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© 1975 Raveendra N. Batra
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Batra, R.N. (1975). Uncertainty and the Properties of the Heckscher-Ohlin Model. In: The Pure Theory of International Trade Under Uncertainty. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-02208-3_4
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DOI: https://doi.org/10.1007/978-1-349-02208-3_4
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-02210-6
Online ISBN: 978-1-349-02208-3
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