Studies in Empirical Economics

Comparative Advantage in International Trade

Theory and Evidence

Authors: Keuschnigg, Mirela

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About this book

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.

Table of contents (10 chapters)

Buy this book

eBook $99.00
price for USA (gross)
  • ISBN 978-3-642-50212-5
  • Digitally watermarked, DRM-free
  • Included format: PDF
  • ebooks can be used on all reading devices
  • Immediate eBook download after purchase
Softcover $129.00
price for USA
  • ISBN 978-3-642-50214-9
  • Free shipping for individuals worldwide
  • Usually dispatched within 3 to 5 business days.
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Bibliographic Information

Bibliographic Information
Book Title
Comparative Advantage in International Trade
Book Subtitle
Theory and Evidence
Authors
Series Title
Studies in Empirical Economics
Copyright
1999
Publisher
Physica-Verlag Heidelberg
Copyright Holder
Springer-Verlag Berlin Heidelberg
eBook ISBN
978-3-642-50212-5
DOI
10.1007/978-3-642-50212-5
Softcover ISBN
978-3-642-50214-9
Series ISSN
1431-8830
Edition Number
1
Number of Pages
VIII, 164
Topics