We analyse the behaviour of a multi-sector small open economy with involuntary unemployment due to fair wages. The equilibrium level of employment depends in an intuitively appealing way on the sectoral structure of the economy. It is shown that induced changes in employment are a driving force behind many of the comparative static results. Fair wage variants of the Heckscher-Ohlin and the Rica...

Available online 26 November 2010 This paper estimates the Heckscher–Ohlin model with annual US data from 1949 to 2006 for outputs of manufactures and services with inputs of fixed capital assets and the labor force. Difference equation and error correction regressions provide estimated coefficients for the comparative static system. Tariffs on manufactures primarily raise the capital return in...

This article recapitulates some of the trade theories reputed to be twentieth century. Here, Heckscher-Ohlin theory (with its variants), endogenous growth theory, product cycle and new were considered. review thereof, amidst others, highlight assumptions these thus present critique same theories.