An Account of Global Factor Trade
- 1 December 2001
- journal article
- Published by American Economic Association in American Economic Review
- Vol. 91 (5) , 1423-1453
- https://doi.org/10.1257/aer.91.5.1423
Abstract
A half century of empirical work attempting to predict the factor content of trade in goods has failed to bring theory and data into congruence. Our study shows how the Heckscher-Ohlin-Vanek theory, when modified to permit technical differences, a breakdown in factor price equalization, the existence of nontraded goods, and costs of trade, is consistent with data from ten OECD countries and a rest-of-world aggregate.Keywords
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