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Special Section : Theories of Trade - Witte

Special Section : Theories of Trade - Witte. Heckscher-Ohlin Theory of Trade. Special Section : Theories of Trade - Witte. Two Goods: Food and Manufactures Two Countries: China and the US Two Factors: Labor and Kapital US: W = 10, R = 5 China: W = 2, R = 10

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Special Section : Theories of Trade - Witte

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  1. Special Section : Theories of Trade - Witte • Heckscher-Ohlin Theory of Trade

  2. Special Section : Theories of Trade - Witte • Two Goods: Food and Manufactures • Two Countries: China and the US • Two Factors: Labor and Kapital • US: W = 10, R = 5 • China: W = 2, R = 10 • Two MC (assume perfect competition): • MC(Manufactures)= 10R + 10W • MC(Food)= 20R + 5W

  3. Special Section : Theories of Trade - Witte • Solve for Pre-Trade Prices • Arbitrage • Comparative Advantage

  4. Special Section : Theories of Trade - Witte • Factor Price Equalization Theory • Stolper-Samuelson Theory • Post-Trade Prices: P(manufactures) = 144, P(food) = 200 Factor Price Equalization Theory

  5. Special Section : Theories of Trade - Witte • Hechscher-Ohlin says • Data says

  6. Special Section : Theories of Trade - Witte • Intra-Industry Trade

  7. Special Section : Theories of Trade - Witte • Why IIT?

  8. Special Section : Theories of Trade - Witte • Why IIT?

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