Advanced Search
MyIDEAS: Login to save this paper or follow this series

Testing Trade Theory in Ohlin's Time

Contents:

Author Info

  • Antoni Estevadeordal
  • Alan M. Taylor

Abstract

An empirical tradition in international trade seeks to establish whether the predictions of factor abundance theory match present-day data. In the analysis of goods trade and factor endowments, mildly encouraging results were found by Leamer et al. But ever since the appearance of Leontief's paradox, the measured factor content of trade has always been found to be far smaller than its predicted magnitude in the Heckscher-Ohlin-Vanek framework, the so-called 'missing trade' mystery. We wonder if this problem was there in the theory from the beginning. This seems like a fairer test of its creators' original enterprise. We apply contemporary tests to historical data on goods and factor trade from Ohlin's time. Our analysis is set in a very different context than contemporary studies -- an era with lower trade barriers, higher transport costs, a more skewed global distribution of the relevant factors (especially land), and comparably large productivity divergence. We find some support for the theory, but also encounter common problems. Our work thus complements the tests applied to today's data and informs our search for improved models of trade.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.nber.org/papers/w8842.pdf
Download Restriction: no

Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8842.

as in new window
Length:
Date of creation: Mar 2002
Date of revision:
Publication status: published as Findlay, R., L. Jonung, and M. Lundahl (eds.) Bertil Ohlin: A Centennial Celebration, 1899–1999. Cambridge: MIT Press, 2002.
Handle: RePEc:nbr:nberwo:8842

Note: DAE IFM ITI
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Email:
Web page: http://www.nber.org
More information through EDIRC

Related research

Keywords:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Leamer, Edward E, 1980. "The Leontief Paradox, Reconsidered," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 88(3), pages 495-503, June.
  2. Maurice Obstfeld & Alan M. Taylor, 1998. "The Great Depression as a Watershed: International Capital Mobility over the Long Run," NBER Chapters, in: The Defining Moment: The Great Depression and the American Economy in the Twentieth Century, pages 353-402 National Bureau of Economic Research, Inc.
  3. Alan M. Taylor, 1996. "International Capital Mobility in History: The Saving-Investment Relationship," NBER Working Papers 5743, National Bureau of Economic Research, Inc.
  4. Alan M. Taylor & Jeffrey G. Williamson, 1991. "Capital Flows to the New World as an Intergenerational Transfer," NBER Historical Working Papers, National Bureau of Economic Research, Inc 0032, National Bureau of Economic Research, Inc.
  5. Harry P. Bowen & Edward E. Leamer & Leo Sveikauskas, 1986. "Multicountry, Multifactor Tests of the Factor Abundance Theory," NBER Working Papers 1918, National Bureau of Economic Research, Inc.
  6. Helpman, Elhanan, 1998. "The Structure of Foreign Trade," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2020, C.E.P.R. Discussion Papers.
  7. Donald R. Davis & David E. Weinstein, 1998. "An Account of Global Factor Trade," Harvard Institute of Economic Research Working Papers 1849, Harvard - Institute of Economic Research.
  8. Maurice Obstfeld & Alan M. Taylor, 2003. "Globalization and Capital Markets," NBER Chapters, in: Globalization in Historical Perspective, pages 121-188 National Bureau of Economic Research, Inc.
  9. Kevin H. O'Rourke & Jeffrey G. Williamson, 2001. "Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650592, December.
  10. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, American Economic Association, vol. 85(5), pages 1029-46, December.
  11. Alan M. Taylor & Jeffrey G. Williamson, 1994. "Convergence in the Age of Mass Migration," NBER Working Papers 4711, National Bureau of Economic Research, Inc.
  12. Antoni Estevadeordal & Alan M. Taylor, 2002. "A Century of Missing Trade?," American Economic Review, American Economic Association, American Economic Association, vol. 92(1), pages 383-393, March.
  13. Estevadeordal, Antoni, 1997. "Measuring protection in the early twentieth century," European Review of Economic History, Cambridge University Press, Cambridge University Press, vol. 1(01), pages 89-125, April.
  14. Jeffrey G. Williamson, 1992. "The Evolution of Global Labor Markets Since 1830 Background Evidence and Hypotheses," NBER Historical Working Papers, National Bureau of Economic Research, Inc 0036, National Bureau of Economic Research, Inc.
  15. O'Rourke, Kevin & Williamson, Jeffrey G., 1994. "Late Nineteenth-Century Anglo-American Factor-Price Convergence: Were Heckscher and Ohlin Right?," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 54(04), pages 892-916, December.
  16. Adrian Wood, 1994. "Give Heckscher and Ohlin a chance!," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 130(1), pages 20-49, March.
  17. Trefler, Daniel, 1993. "International Factor Price Differences: Leontief Was Right!," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(6), pages 961-87, December.
  18. O'Rourke, Kevin H & Taylor, Alan M & Williamson, Jeffrey G, 1996. "Factor Price Convergence in the Late Nineteenth Century," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(3), pages 499-530, August.
  19. Clark, Gregory, 1987. "Why Isn't the Whole World Developed? Lessons from the Cotton Mills," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 47(01), pages 141-173, March.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:8842. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.