What Will Nations Trade

What Will Nations Trade - WHAT WILL NATIONS TRADE THE...

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WHAT WILL NATIONS TRADE? THE DETERMINANTS AND EFFECTS OF TRADE
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H-O-S FACTOR THEORY OF TRADE Heckscher-Ohlin-Samuelson theory says that countries will export those goods, which make relatively intensive use of factors (land, labor, etc) in which they are relatively abundant.
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Heckscher-Ohlin (H-O) Theory Country A Country B Abundance of Labor Abundance of Land Labor Intensive Goods Land Intensive Goods A country will have a comparative advantage in goods that intensively use their abundant resources
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Discuss “The world’s poorest countries cannot find anything to export. There is no resource that is abundant-certainly not capital, and in small poor countries not even land or labor is abundant.”
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Example: Problem Factor Big Rich Country Small Poor Country K $ 100 BILLION $ 50 MILLION L 10 million workers 0.1 million workers T 1 million sq.km 5000 sq.km K/L $10,000 / worker $ 500/worker T/L 0.1 sq.km/worker 0.05 sq.km/worker L/T 10 workers/sq.km 20 workers/sq.km L/K 0.0001 worker/$ 0.02 worker/$
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This note was uploaded on 11/07/2010 for the course ECON 0001 taught by Professor Kitsikopoulos during the Spring '08 term at NYU.

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What Will Nations Trade - WHAT WILL NATIONS TRADE THE...

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