Professor Haberler’s paper is organised as a commentary on the ‘factor proportions’ approach to comparative advantage and its relation to various alternatives. Professor Ohlin, together with Eli Heckscher, was of course the pioneer of this approach in his 1924 doctoral dissertation and more fully in his great treatise of 1933. His paper today moves further on that same majestic trajectory. It reminds us once more that though he did make factor proportions the core of his general equilibrium analysis his vision of the ‘international allocation of economic activity’ is much broader and richer in scope than this alone would imply, embracing as it does indivisibilities and the economies of large-scale production, location and transport costs, and the movement of capital and labour across national boundaries. The common practice of hyphenating their names together as a prefix to words like ‘model’, ‘theory’ and ‘approach’ tends to make Heckscher and Ohlin indistinguishable, like those two other famous Scandinavians Rosencrantz and Guildenstern. In fact I once had a student in Rangoon who wrote in an examination that ‘The factor proportions theory of comparative advantage was put forward by a very famous Swedish economist named Heckscher Ohlin’.
KeywordsInternational Trade Comparative Advantage Factor Proportion Factor Price Factor Endowment
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- Bardhan, P. K., Economic Growth, Development and Foreign Trade (Wiley, 1970).Google Scholar