WK5_15Sept_Ch_5

WK5_15Sept_Ch_5 - Week 4 (Thursday, Sept. 14, 2011) Finish...

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Finish Chapter 4 and 5 No Need to Read Chapter 6 Additional Study problems Week 4 (Thursday, Sept. 14, 2011)
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Key points in syllabus 6/6 Doing Well in the Course: Learn the lecture material Tests based directly on lectures; I test you on the smallest detail to broad themes Study the sections in the text directly related to lecture material Study Guide Headings/Topics on Power Point Slides
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Useful Study problems Ch. 2 5, 7, 9, 11 Ch. 3 1,3, 5, 7 Ch. 4 1,3 Ch. 5 1,3,5,10
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Today 1. Continue Test of Heckscher-Ohlin or Factor Abundance Model Consequence 1 Consequence 2 Consequence 3 2. Data on Stolper-Samuelson 3. NEW THEORY Intra-Industry Trade vs. Inter-Industry Trade Tastes and Scale Economies Impact of Trade Opening
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Testing the Models’ Predictions: How Well Does Heckscher-Ohlin Model Predict? Recall From Tuesday
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1st Formal Test Arguably the most famous empirical test in economics Wasily Leontief, nobel prize for early work on input-output analysis Calculated factor intensity of U.S. exports and U.S. imports: Kx/Lx Km/Lm
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What Would You expect? Kx/Lx Km/Lm > = <
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Leontief’s Result!! Kx/Lx < Km/Lm This troubling result labeled: The Leontief Paradox
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Consequence #1 Measuring Abundance with Multiple Factors of Production K /∑K L / ∑L Y /∑Y T / ∑T RDS / ∑RDS > = <
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WK5_15Sept_Ch_5 - Week 4 (Thursday, Sept. 14, 2011) Finish...

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