A half century of empirical work attempting to predict the factor content of trade in goods has failed to bring theory and data into congruence. Our study shows how the Heckscher-Ohlin-Vanek theory, when modified to permit technical differences, a breakdown in factor price equalization, the existence of nontraded goods, and costs of trade, is consistent with data from ten OECD countries and a r...

This paper studies the effects of trade liberalization on capital flows in a dynamic Heckscher-Ohlin model and makes four contributions. First, we identify an interest rate over-determination problem such model, solve it with endogenous discount factor. Second, show that developing country generally leads to greater current account surplus, which is exact opposite common but partial equilibrium...

This paper argues that international trade should affect local organization of production in a systematic way. By using the standard Heckscher-Ohlin-Samuelson model we show that the export sector is more likely to demonstrate fragmentation, entrepreneurship and outsourcing compared to the importcompeting sector in a typical labor abundant country. Liberal trade regime will promote entrepreneurs...

In this paper, we study the stability of equilibrium for a foreign trade model consisting of three countries. As the gravity equation has been proven an excellent tool of analysis and adequately stable over time and space all over the world, we further enhance the problem to three masses. We use the basic Structure of Heckscher–Ohlin–Samuelson model. The national income equals consumption outla...

The effects of technical progress on relative factor prices in the two-country, two-good, two-factor Heckscher-Ohlin model are investigated. Technical progress is classified according to factor-augmenting bias, factor-using bias, and sector bias. A complete set of relations between technical progress parameters and relative factor prices, depending on the elasticities of substitution in demand ...

Contrary to conventional wisdom, this paper shows that a high-wage economy can paradoxically reduce its level of aggregate unemployment by engaging in international trade with low-wage country. We demonstrate possibility after introducing minimum wage into the basic specific-factor model (with immobile capital and mobile labor), even though opposite result is known arise longer-run framework st...

This paper uses three years of individual-level data to analyze the determinants of individual preferences over trade and immigration policies in the United States. Different economic models make contrasting predictions about what forces should shape these preferences. We have four main empirical results. First, we find that factor type dominates industry of employment in explaining support for...