Heckscher-Ohlin trade theory (1919)

First developed by Eli Heckscher (1879-1952) and later developed by fellow Swedish economist Bertil Ohlin (1899-1979) in 1933, Heckscher-Ohlin trade theory is a theory to explain the existence and pattern of international trade based on a comparative cost advantage between countries producing different goods.

Heckscher and Ohlin state that this advantage exists because of the relative resource endowments of the countries trading.

However, the Russian-born American economist Wassily Leontief (1906-1999) in 1954 examined US foreign trade and found that US exports were more labor intensive and imports were more capital intensive (the Leontief paradox).

E Heckscher, ‘The Effect of Foreign Trade on Distribution of Income’, Readings in the Theory of International Trade (1949);
Bertil Ohlin, Interregional and International Trade (1933)

2 thoughts on “Heckscher-Ohlin trade theory (1919)

  1. zovre lioptor says:

    A powerful share, I simply given this onto a colleague who was doing slightly analysis on this. And he in reality bought me breakfast as a result of I found it for him.. smile. So let me reword that: Thnx for the treat! But yeah Thnkx for spending the time to discuss this, I feel strongly about it and love studying more on this topic. If potential, as you grow to be experience, would you thoughts updating your blog with more particulars? It’s highly helpful for me. Huge thumb up for this weblog publish!

Leave a Reply

Your email address will not be published. Required fields are marked *