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A practical Heckscher-Ohlin model

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  • Adrian Wood (ODID)

Abstract

This paper offers a formalisation of the insights of Heckscher and Ohlin that is more consistent with the evidence than standard models, and simple enough to be used for teaching and policy analysis, as well as for research. It describes both the effects of a country's factor endowments on the commodity composition of its trade and the effects of trade-related changes in goods prices on factor prices. The model applies to any numbers of goods or factors. Trade costs, including policy barriers, play a central role in the model, especially by reducing elasticities of demand.

Suggested Citation

  • Adrian Wood (ODID), "undated". "A practical Heckscher-Ohlin model," QEH Working Papers qehwps170, Queen Elizabeth House, University of Oxford.
  • Handle: RePEc:qeh:qehwps:qehwps170
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    File URL: http://www3.qeh.ox.ac.uk/RePEc/qeh/qehwps/qehwps170.pdf
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    References listed on IDEAS

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    7. Wood, Adrian, 1995. "North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World," OUP Catalogue, Oxford University Press, number 9780198290155.
    8. Adrian Wood (QEH), "undated". "Heckscher-Ohlin in Theory and Reality," QEH Working Papers qehwps157, Queen Elizabeth House, University of Oxford.
    9. Leamer, E.E., 1995. "The Heckscher-Ohlin Model in Theory and Practice," Princeton Studies in International Economics 77, International Economics Section, Departement of Economics Princeton University,.
    10. Anthony J. Venables, 2003. "Winners and losers from regional integration agreements," Economic Journal, Royal Economic Society, vol. 113(490), pages 747-761, October.
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    13. Ronald W. Jones, 1965. "The Structure of Simple General Equilibrium Models," Journal of Political Economy, University of Chicago Press, vol. 73, pages 557-557.
    14. Markusen, James R. & Venables, Anthony J., 2007. "Interacting factor endowments and trade costs: A multi-country, multi-good approach to trade theory," Journal of International Economics, Elsevier, vol. 73(2), pages 333-354, November.
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