Deardorff, A.V. - Research Seminar in International Economics, University … - 2000
. The model for this purpose is the two-cone version of the Heckscher-Ohlin (HO) trade model, in which countries have … different factor prices even with free trade and in which they produce mostly different groups of goods. In that model, unlike … rich country. The paper argues that this will then lead to the rich country restricting trade. This in turn will lower the …