Abstract
The step from Ricardo to Heckscher—Ohlin in international trade theory carried with it some optimistic overtones with respect to the international distribution of income. The factor price equalisation theorem reduced the problem of rich and poor nations to a question of trade, capital accumulation and functional distribution of income. The promotion of free trade would in the long run be sufficient to equalise between countries the rewards of labour and capital. Reality’s failure to comply with this theoretical prediction has produced a variety of suggestions as to which simplifying assumptions of the Heckscher—Ohlin model are not fulfilled in the real world.
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© 1981 Sven Grassman and Erik Lundberg
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Hamilton, C., Söderström, H.T., Dervis, K. (1981). Technology and International Trade: a Heckscher—Ohlin Approach. In: Grassman, S., Lundberg, E. (eds) The World Economic Order. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-16488-2_6
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DOI: https://doi.org/10.1007/978-1-349-16488-2_6
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