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Learning Heckscher-Ohlin Model in Five Easy Steps

Author

Listed:
  • Omer GOKCEKUS
  • Kevin BENGYAK

    (Seton Hall University, USA)

Abstract

With students in the policy and business schools with no formal economics background in mind, we propose an intuitively appealing and simple step-by-step graphical approach to explain the Heckscher-Ohlin (HO) model. Our approach is simple because it needs only two pieces of information, specifically about factor endowments and factor intensities, and from there it uses straightforward logic to construct the HO model. In easy five steps we show how to build the HO model and derive its three theorems, specifically, pattern of trade, factor price equalization, and income distribution.

Suggested Citation

  • Omer GOKCEKUS & Kevin BENGYAK, 2015. "Learning Heckscher-Ohlin Model in Five Easy Steps," Journal of Economics and Political Economy, KSP Journals, vol. 2(1), pages 137-143, March.
    • Handle: RePEc:ksp:journ1:v:2:y:2015:i:1:p:137-173
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • A20 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - General
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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