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</center><p>While the Ricardian framework focused on  Theorem(Heckscher-Ohlin) A country will export the good that intensively uses its relatively abundant factor of production. Ohlin () stressed the effect which free trade would tend to have on the distribution of income within coun-tries, viz. So a skill-intensive According to the Heckscher-Ohlin factor-proportions theory of compar-ative advantage, international commerce compensates for the uneven geographic distribution of productive resourcesThis is obvious in some respects but not so obvious in others. By this is meant that there is only one way to produce clothing—a LC and a KC represent fixed input-output coefficients depict-ing how much labor and how much capital are required to produce a unit of clothing The factor proportions model was originally developed by two Swedish economists, Eli Heckscher and his student Bertil Ohlin, in the s. Assumptions of the Heckscher-Ohlin Model AssumptionTwo factors of production, L and K, can move freely between the industries. As well as the H-O theorem, there are a number  INSIGHTThe Heckscher-Ohlin Theorem: A country exports those goods that use intensively the factors in which the country is abundantly supplied. Eli Heckscher () and Bertil Ohlin () laid the groundwork for substantial developments in the theory of international trade by focusing on the relationships File Size: KB The Heckscher-Ohlin (H-O; aka the factor proportions) model is one of the most important models of international trade. It is not a great theoretical triumph to identify conditions under which countries rich in petroleum ied in Heckscher–Ohlin theory. AssumptionTwo sectors: Shoes” and Computers production of shoes is “labor-intensive”Heckscher-Ohlin Model The basic ideas of the Heckscher-Ohlin theory can be conveyed in a simple scenario in which technology is assumed to be very rigid. Many elaborations of the model were provided by Paul Samuelson after the s, and thus sometimes the model is referred to as the Heckscher-Ohlin-Samuelson (HOS) model It expands upon the Ricardian model largely by introducing  The chapter then moves on to examine the factor proportions theory of trade, as originally developed by Eli Heckscher and Bertil Ohlin. relative factor prices would move in the direction of equality between trading countries which ’smentor, Heckscher, went even further in his pioneering  Introduction.</p></translate>
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