Post on 31-Mar-2015
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
(四) Resources and Trade: The Heckscher-Ohlin Model
• 1.A Model of Two-Factor Economy
• 2.Effects of International Trade Between Two-Factor Economies
• 3.Empirical Evidence on the Heckscher-Ohlin Model
• 4. Summary
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
1.A Model of a Two-Factor Economy
• (1).Assumptions of the Model
• (2).Factor Prices and Goods Prices
• (3).Resources and Output
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
(1).Assumptions of the Model
• The economy produce two goods: cloth and food two inputs: labor and land labor and land are in limited supply then, define: aTC, aLC, aTF, aLF, L, T
* Factor prices: w/r
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
Figure 4-1 Input Possibilities in Food Production
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II
aTF
aLF
Input combinations that produce one calorie of food
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Figure 4-2 Factor Prices and Input Choices
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CC
FF
w/r
T/L
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
(2).Factor Prices and Goods Prices
SS
PC/PF
w/r
Figure 4-3 Factor Prices and Goods Prices
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
Figure 4-4 From Goods Prices to Input Choices
CC
FF
w/r
T/L
CC
FF
w/r
T/L
SS
PC/PF
w/r2
w/r1
PC/PF2 PC/PF
1 TC/LC1 TC/LC
2
TF/LF1
TF/LF2
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
(3).Resources and Output
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1 C
FOC
OF
LC
LF
TC TF
Figure 4-5 The Allocation of Resources
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Figure 4-6 An Increase in the Supply of Land
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1 C
F1
OC
OF1
LC
LF1
TC 2
F2
LF2
TF2
TF1
OF2
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
Figure 4-7 Resources and Production Possibilities
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QF2
QF1
QF
QC2 QC
1 QC
TT1 TT2
Slope=-PC/PF
Slope=-PC/PF
1
2 Generally, an economy will tend to be relatively effective at producing goods that are intensive in the factors with which the country is relatively well-endowed.
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
2.Effects of International Trade Between Two-Factor Economies
(1).Relative Prices and the Pattern of Trade
(2).Trade and the Distribution of Income
(3).Factor Price Equalization
(4). Case Study: North-South Trade and Income
Inequality
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12第 1 页
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
(1).Relative Prices and the Pattern of Trade
Assumption: Two countries
①have the same relative demands
②have the same technology level
③Home: labor-abundant (L/T > L*/ T*)
Foreign: land-abundant
④factor can not move between countries
⑤completely competition
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
(1).Relative Prices and the Pattern of Trade
. . .
PC/PF
QC+QC*
QF+QF*
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3
RS* RS
RD
Figure 4-8 Trade Leads to a Convergence of Relative Prices
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
• Result:
Countries tend to export goods whose production is
intensive in factors with which they are abundantl
y endowed
• Heckscher-Ohlin Theorem:
A country will export that commodity which uses i
ntensively its abundant factor and import that co
mmodity which uses intensively its scarce factor.
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
(2).Trade and the Distribution of Income
• In Home, where the relative price of cloth rises:
-----Laborers are made better off and landowners are
made worse off.
• In Foreign, where the relative price of cloth falls, the
opposite happens:
• Owners of a country’s abundant factors gain
from trade, but owners of a country’s scarce
factors lose.
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
• Difference between the specific factors model
and the Heckscher-Ohlin model in terms of inc
ome distribution effects:
– The specificity of factors to particular industries is
often only a temporary problem.
– In contrast, effects of trade on the distribution of in
come among land, labor, and capital are more or le
ss permanent.
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
(3).Factor Price Equalization
• Trade leads to equalization of factor prices.
• In reality, factor prices are not equalized
(Table 4-1).
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
• Three assumptions are in reality untrue
①.both countries produce both goods
②.technologies are the same
③.trade actually equalize the prices of goods in
the two countries
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
Table 4-1 Comparative International Wage Rates
United States
Germany
Japan
Spain
South Korea
Portugal
Mexico
Sri Lanka*
100
121
111
55
41
24
12
2
CountryHourly compensation of production workers,2000
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
(4). Case Study: North-South Trade and Income
Inequality
North-South trade in manufactures fits to t
he factor proportions model much better.
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
Table 4-2 Composition of Developing-Country Exports
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1973
1995
30
24
47.5
22.5
22
62.5
Agricultural Products
Mining Products
Manufactures Goods
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
3.Empirical Evidence on the Heckscher-Ohlin Model
(1).Testing the Heckscher-Ohlin Model
(2).Implications of the Tests
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
(1).Testing the Heckscher-Ohlin Model
①.Tests on U.S. Data.
②.Tests on Global Data.
③.Tests on North-South Trade.
④.The Case of the Missing Trade.
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
①.Tests on U.S. Data.
ⅰ.Leontief paradox
Wassily Leontief found that U.S. export w
ere less capital-intensive than U.S. imports.
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
Year Factors Export Import Export/ Import
1947 Capital($) 2,550,789 3,091339
1.30
Labor( hours)
182 170
K/L 14,100 18,180
1956 Capital($) 2256,800 2,303,400
1.06
Labor( hours)
174 168
K/L 12,977 13,726
1971 (Baldwin)
Capital($) 1,876,000 2,132,000
1.27
Labor( hours)
131 119
K/L 14,200 18,000
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
ⅱ.the explanation of Leontief paradox
labor resources factor intensity reversal (figure 4-9) demand reversal (figure 4-10)
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
Figure 4-9 Effects of factor intensity reversal
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K
Lw1
w2
KF′
KC′
kCkF
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
Figure 4-10 Effects of Demand Reversal on International Trade
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QC, QC
′
QF
QF′
QF
QF′
QC
QC′
PC′/PF
′
PC/PF
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
Table 4-4: Testing the Heckscher-Ohlin Model
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(2).Implications of the Tests
Empirical results concerning the Hec
kscher-Ohlin theory do not support its pre
dictions concerning resou-rce endowment
s explaining patter-ns of trade.
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
4. Summary
• This chapter proceeds by first presentin
g a general equilibrium model of an econ
omy with two goods produced by two fac
tors under the assumption of fixed coeffi
ci-ent production functions.
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第 页03/01/20 绍兴文理学院经管学院 COPY RIGHT
• Many of the important results of interna
tional trade theory are developed. These i
nclude: the Ry-bcznski Theorem, the Stol
per-Sam-uelson Theorem, and the Factor
Price Equalization Theorem.
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• Implications of the Heckscher-Ohlin m
odel for the pattern of trade among countr
ies are discussed, as are the failures of em
pirical evidence to confirm the predicti-o
ns of the theory.
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