The standard version of the Heckscher-Ohlin model of international trade treats the factors of production—land, labor, and capital—as essentially analytically similar and symmetrical. In these six essays Ronald Findlay explores modifications to the factor proportions model, looking in particular at what happens when human capital and land use are allowed to vary endogenously.
Findlay extends the factor proportions theory of international trade to consider capital accumulation, income distribution, and factor mobility in a growing world economy. Among the questions he addresses are such fundamental issues as the conditions under which international trade equalizes the rate of interest; the effects of learning and invention on economic growth and comparative advantage; the role of human capital and skill formation in determining patterns of comparative advantage and the reciprocal effect of international trade on these variables through its impact on wage differentials between skilled and unskilled workers; the incorporation of new territories into a trading system by extensions of the frontier and labor migration as in the establishment of the Atlantic economy of the nineteenth century; and the impact of reductions in transport costs of industrial raw materials on global patterns of manufacturing activity and comparative advantage.
Eli Heckscher (1879-1952) is celebrated for his contributions to international trade theory, particularly the factor proportions theory of comparative advantage in international trade known as the Heckscher-Ohlin theory. His work in both economic theory and economic history is notable for combining theoretical insights with a profound knowledge of economic history and the history of economic thought. In this volume, leading international economists assess the importance of Heckscher's work and its relevance to the contemporary practice of economic history.The contributors first discuss Heckscher's efforts to forge the discipline of economic history by combining both the historian's careful evaluation of sources and the economist's rigorous models. The Heckscher-Ohlin theory of factor proportions is described and tested empirically. Contributors then apply the theory to historical material, including Mediterranean trade in Biblical times, the economic effects of two periods of plague eight centuries apart, and tariff policy in 35 countries from 1870 to 1938. Heckscher's masterly work on mercantilism, the Continental Blockade, and Swedish economic history is also described and appraised in light of recent historical research.Contributors:Benny Carlson, François Crouzet, Lance E. Davis, Stanley L. Engerman, Ronald Findlay, Harry Flam, Rolf G. H. Henriksson, Eva, Einar, Ivar, and Sten Heckscher, Douglas A. Irwin, Ronald W. Jones, Deepak Lal, Håkan Lindgren, Mats Lundahl, Lars Magnusson, Joel Mokyr, Mats Morell, Patrick O'Brien, Kevin H. O'Rourke, Bo Sandelin, Lennart Schön, Johan Söderberg, Peter Temin, Jeffrey G. Williamson
Bertil Ohlin, international trade theorist, winner of the 1977 Nobel Prize in Economics, and leader of the Swedish Liberal Party for more than twenty years, is considered to be the major single influence on the development of international economics in the twentieth century. This volume, celebrating the centennial of Ohlin’s birth, examines his life and his influence on modern economic thought. It also contains the first English translation of his licentiate thesis, in which he first set out his theory of international trade.