国际经济学ch04.pptVIP

Carbaugh, Chap. 4 International EconomicsBy Robert J. Carbaugh9th Edition Chapter 4: Trade Model Extensions and Applications Factor endowment theory H-O theory Factor price equalization Distribution of income Tests of factor endowment theory introduction In the 1920s and 1930s, the Swedish economists Eli Hechscher and Bertil Ohilin formulated a theory addressing two questions left largely unexplained by Richardo: what determines comparative advantage? what effect does international trade have on the earning of various factors of production in trading nations. In 1919, Heckscher published “The Effect of Foreign Trade on the Distribution of Income” In 1933 Ohlin published “Interregional and International Trade” Ohlin was awarded the 1977 Nobel prize in economics for his contribution to the theory of international trade. The statement of the theory Because Heckscher and Ohlin maintained that factor endowments underlie a nation’s comparative advantage, their theory became known as the factor-endowment theory, also known as the Heckscher-Ohlin theory. Comparative advantage is explained entirely by different national supply conditions, especially resource endowments In particular, the theory highlights the role of nation’s resource endowments as the key determinant of comparative advantage. Factor endowment theory (Heckscher-Ohlin) Brazil exports coffee because it has an abundance of the soil and climatic conditions required for coffee’s production; India and China are huge exporters of shoes and garments because they are heavily endowed with labor. Nations export products that use inputs which are relatively abundant (cheap) at home, and import products which need inputs which are relatively scarce (expensive) at home. Factor endowment theory: assumptions Nations all have the same tastes and preferences (same indifference curves) They use factor inputs which are of uniform quality They all use the same technology This last assumption is made explicitly n