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Factor Content of Trade : Nonhomothetic Preferences and 'Missing Trade'

Chung, Chul - 2004

Recent empirical work has documented that the measured factor content of trade is too small compared to the theoretical prediction: missing trade. This misprediction may arise from the strong assumption that each country consumes services of factors in proportion to its share of world income. By...

Persistent link: https://www.econbiz.de/10014073547

Technology, Factor Supplies, and International Specialization

Harrigan, James - 1998

The standard neoclassical model of trade theory predicts that international specialization will be jointly determined by cross-country differences in relative factor endowments and relative technology levels. This paper uses economic theory to specific an empirical model of specialization...

Persistent link: https://www.econbiz.de/10014075279

On Theories Explaining the Success of the Gravity Equation

Evenett, Simon J.; Keller, Wolfgang - 1998

Examining the accuracy of the monopolistic competition theory's predictions for import volumes, we assess whether this theory accounts for the empirical success of the gravity equation. Since certain factor-endowment based theories have the same prediction for import volumes, we employ...

Persistent link: https://www.econbiz.de/10014077367

Heckscher-Ohlin Business Cycles

Cunat, Alejandro; Maffezzoli, Marco - 2002

This paper introduces Heckscher-Ohlin trade features into a two-country DSGE model, and studies how productivity shocks … propagate through trade in goods. In comparison with standard models, (i) transitory shocks to productivity have permanent … effects on country-level aggregate variables; (ii) aggregate productivity shocks have relevant effects on the sectoral …

Persistent link: https://www.econbiz.de/10014113462

The Distributional Effects of International Fragmentation

Kohler, Wilhelm - 2002

Economic globalization causes an increasing international fragmentation (disintegration) of value-added-chains, whereby firms outsource components of production to foreign markets. There is a high level of concern about unwelcome distributional effects. This paper provides a theoretical...

Persistent link: https://www.econbiz.de/10014117260

Trade and Selection with Heterogeneous Firms and Perfect Competition

Bai, Xue; Chatterjee, Arpita; Krishna, Kala; Ma, Hong - National Bureau of Economic Research - 2022

This paper develops a new model with heterogeneous firms under perfect competition in a Heckscher-Ohlin-Samuelson setting. We show that trade need not make selection in the comparative advantage sector stricter as suggested by earlier work. Selection is driven by the capital intensity in entry...

Persistent link: https://www.econbiz.de/10013462698

Technology, Factor Supplies, and International Specialization

Harrigan, James - 1998

Persistent link: https://www.econbiz.de/10014064356

Consumer Heterogeneity, Free Trade, and the Welfare Impact of Income Redistribution

Ju, Jiandong - 2009

Demographic differences, like young and elderly, and healthy and disabled, are summarized as consumers' heterogeneity in expenditure shares, and introduced into an otherwise standard HO model, together with income distribution in this paper. We prove that free trade may hurt consumers who spend...

Persistent link: https://www.econbiz.de/10014207541

North-South Trade Liberalization and Returns to Skill in the South : The Case of Mexico

Otero, Rafael; Hazarika, Gautam - 2021

This study examines the effect of NAFTA, an instance of North-South trade liberalization, on returns to skill in Mexico. Mexico is abundant in low-skill workers relative to the US and Canada, and so, by the Hecksher-Ohlin-Samuelson trade model, NAFTA ought to have raised the relative earnings of...

Persistent link: https://www.econbiz.de/10013324881

US Trade and Wages : The Misleading Implications of Conventional Trade Theory

Lawrence, Robert Z. - 2013

Conventional trade theory, which combines the Heckscher-Ohlin theory and the Stolper-Samuelson theorem, implies that expanded trade between developed and developing countries will increase wage equality in the former. This theory is widely applied. It serves as the basis for estimating the...

Persistent link: https://www.econbiz.de/10013094649