Patterns of Trade and Growth Across Cones
AbstractThis paper examines the implications of the Heckscher-Ohlin (HO) Model for the patterns of production and trade that will emerge as a country grows. It focuses primarily on world equilibria that include two or more cones of diversification. Starting with the textbook model of two factors and two goods, growth paths for production and trade are derived in terms of a country's capital-labor ratio relative to that of the world. With additional goods and countries, multiple cones create a ladder of comparative advantage that a country will climb as it accumulates capital relative to the world. With additional factors as well, more complicated patterns can emerge. In a three-factor model based on Krueger (1977), a country with fixed land, growing labor, and faster growing capital can first work its way down the ladder of comparative advantage before climbing back up. Using a graphical representation of a more general three-factor model due to Leamer (1987), cones of diversification with large numbers of goods take the form of polygons that a growing country may pass through, then cross between. In all cases, the lesson of the HO Model is that growth causes repeated and extreme changes in patterns of specialization and trade over time.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 443.
Length: 42 pages
Date of creation: 1999
Date of revision:
INTERNATIONAL TRADE ; ECONOMIC GROWTH;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Catia Batista & Jacques Potin, 2007. "Stages of diversification and specialization in an Heckscher-Ohlin world, 1976-2000," Economics Series Working Papers 356, University of Oxford, Department of Economics.
- Andrea Brasili & Paolo Epifani & Rodolfo Helg, 1999.
"On the dynamics of trade patterns,"
LIUC Papers in Economics
61, Cattaneo University (LIUC).
- Andrea Brasili & Paolo Epifani & Rodolfo Helg, 2000. "On the Dynamics of Trade Patterns," International Trade 0004006, EconWPA.
- Andrea Brasili & Paolo Epifani & Rodolfo Helg, 2000. "On the Dynamics of Trade Patterns," KITeS Working Papers 115, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2000.
- Alan Deardorff, 2001. "Developing country growth and developed country response," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 10(4), pages 373-392.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (FSPP Webmaster).
If references are entirely missing, you can add them using this form.