![]() ![]() In the 1950s and 1960s, some noteworthy extensions to the model were made by Jaroslav Vanek, and so occasionally the model is called the Heckscher-Ohlin-Vanek model. Many elaborations of the model were provided by Paul Samuelson after the 1930s, and thus sometimes the model is referred to as the Heckscher-Ohlin-Samuelson (HOS) model. The factor proportions model was originally developed by two Swedish economists, Eli Heckscher and his student Bertil Ohlin, in the 1920s. Identify the four major theorems in the H-O model.Learn the basic assumptions of the Heckscher-Ohlin (H-O) model, especially factor intensity within industries and factor abundancy within countries.The implications for income distribution and trade are highlighted. The end of the chapter discusses the specific factor model, which represents a cross between the H-O model and the immobile factor model. In other words, some will gain from trade, some will lose, but the net effects are still likely to be positive. In other words, all markets are everywhere interconnected.Īmong the important results are that international trade can improve economic efficiency but that trade will also cause a redistribution of income between different factors of production. With the H-O model, we learn how changes in supply or demand in one market can feed their way through the factor markets and, with trade, the national markets and influence both goods and factor markets at home and abroad. These interactions across markets are one of the important economics lessons displayed in the results of this model. In its two-by-two-by-two variant, meaning two goods, two factors, and two countries, it represents one of the simplest general equilibrium models that allows for interactions across factor markets, goods markets, and national markets simultaneously. It expands upon the Ricardian model largely by introducing a second factor of production. ![]() The Heckscher-Ohlin (H-O aka the factor proportions) model is one of the most important models of international trade. Chapter 5 The Heckscher-Ohlin (Factor Proportions) Model
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |