Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask International Economics Expert

In the Ricardian model, everyone seems to benefit from trade. However, the Heckscher-Ohlin model seems to show that some lose from trade as well. Who are the losers in the HO model, and how do they not benefit from trade?

Ricardo stated that countries specialize in producing those products which they produced best. Countries do not specialize in producing vast number of goods rather concentrate on only those in which they have maximum advantage.

He assumed that labor is the basic factor of production, its productivity is constant (MPL), is perfectly mobile in different sectors but not internationally, there exists perfect competition and limited amount of labor in the economy

The H-O theory advocates that countries should produce and export only those products for which they had abundance of factors of production and import only the products for which they are deficient in factors.

The Heckscher-Ohlin theory assumes that labor and capital move freely between different sectors, some products are labor intensive while others capital; there exists difference in the amount of capital and labor in different countries, the trade is free, same technologies exist in long term across the boundaries and tastes of the people are same

 

International Economics, Economics

  • Category:- International Economics
  • Reference No.:- M9310478

Have any Question?


Related Questions in International Economics

Part of the return on the investment comes from the asset

Part of the return on the investment comes from the asset itself and part from the currency of the foreign currency. agree or disagree?

Legal aspects of international trade and enterprisetopic

Legal Aspects of International Trade and Enterprise TOPIC for ASSIGNMENT: Bumper Development Corp. Ltd. V. Commissioner of Police of the Metropolis and Others (For case review, refer Textbook: pp. 150-153) ASSIGNMENT GUI ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As