An Inframarginal Analysis of the Heckscher-Olin Model with Transaction Costs and Technological Comparative Advantage

Cheng, Wen Li; Sachs, Jeffrey D.; Yang, Xiaokai

In the paper we introduce technological comparative advantage and transaction costs into the Heckscher-Olin (HO) model and refine the HO theorem, the Stolper-Samuelson theorem, the Rybczynski theorem, and factor equalization theorem. The refined core theorems can be used to accommodate recent empirical evidence that is at odds with the core theorems.


More About This Work

Academic Units
Earth Institute
Center for International Development at Harvard University
CID Working Paper, 9
Published Here
September 25, 2009