Free Trade in a World of Internationally Mobile Technology: The Orthodoxy Then and Now

In a recent paper, Kemp and Shimomura extend the basic Heckscher-Ohlin model to show that no country has an incentive to hoard its technology. This basic result is not new. It was first shown by William Ellis in 1825. Ellis extended Ricardo's model to obtain the same free trade result. The history behind these similar theoretical developments is remarkably similar. These writers were responding to increased debates over the benefits of free trade when technologies are mobile between countries. The most widely accepted theoretical models of the time were extended so that policy discussions could be grounded in a strong theoretical base.