note sparse e grafici sul modello di heckscher e ohlin luca de benedictis
TRANSCRIPT
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Note sparse e grafici sul modello di Heckscher e Ohlin
Luca De Benedictis
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Factor endowments
Physical definition
ForeignHome
LK
LK
Factor price definition
ForeignHome
rw
rw
Home is relatively capital-abundant (= labor-scarce)
Foreign is relatively labor-abundant (= capital-scarce)
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Factor intensities
XY LK
LK
Good Y relatively capital-intensive
Good X is relatively labor-intensive
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Endowments and production possibilities
X
Y
FAp
L
K
HE
FE
HH L
Kk
Fk
HX
HX
HY
HY
FX
FX
FY
FY
HAp
Note: Here Y is more capital-intensive at all factor price ratios.
In autarky, the relative price of the labor-intensive good (X) is lower in the labor-abundant country (Foreign).
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International equilibrium in the Heckscher-Ohlin model
X
Y
HX
HY
FX
FY
)( PC XX 0
p
HomeEx
ForeignEx
HAp
FAp
*p
*p
=C=D
HA FA
C D
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Trade in the Heckscher-Ohlin model
• The Heckscher-Ohlin theorem: A country will export the commodity that intensively uses its relatively abundant factor.
• The relatively labor-abundant country exports labor services embodied in goods and imports capital services embodied in goods
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Trade and factor prices in theHeckscher-Ohlin model
Indirect exports of a factor
supply of the factor in the domestic market
domestic price of the factor
Indirect imports of a factor
supply of the factor in the domestic market
domestic price of the factor
Trade tends to make factor prices more similar between trading countries
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Product prices and factor prices in the H-O model
Y
X XO
YO
XL
YL
XK
YK
B
A
A'B
A
ApB
Bp
A
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Unit value isoquants and isocosts in the H-O model
1$X
L
K
1$Y
1$ rKwL
Yk
Xk
r1$
w1$
YYY
XXX
rKwLYp
rKwLXp
1$
1$Hk
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Some stylized facts about economic trends since 1975
• Physical and political barriers to trade have been significantly reduced in many countries
• Real wages (for unskilled labor) have remained constant or even fallen in the North - increased income inequalities there.
• Real wages have increased for large groups of workers in the South (but not for all and large variations between countries).
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Factor price equalization
L
K
Yk
Xk
HaFa*
HaY 1$ FaY 1$
HaX 1$
FaX 1$
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Limits to factor price equalization
L
K
Yk
Xk
FH
'Fk
Hk
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How will a change in product prices affect factor prices?
Y
X XO
YO
XL
YL
XK
YK
A
B
A
B
A'
B
Ap
Bp
Xk YkandA
p
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Another look at how a change in product prices affects factor
prices
L
K
AB
AY 1$
YAk
XAk
BY 1$
AX 1$
BX 1$
XBk
YBk
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How will a change in product prices affect real wages?
K
LKf ,
LKf ,
A
B
slope = MPK
LMPpw
LXX
MPp
w
LYY
MPp
w
KMPpr
KXX
MPp
r
KYY
MPp
r
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The Stolper-Samuelson theoremIf there are constant returns to scale and both goods continue to be produced, a relative increase in the price of a good will increase the real return to the factor used intensively in that industry and reduce the real return to the other factor.
In our example:• there was a relative increase in the price of good X• labor is used intensively in that sector• in both sectors, the capital-intensity of production was raised after the price change
LXX
MPp
w
LYY
MPp
w
KXX
MPp
r
KYY
MPp
r
and
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The effect of changes in factor endowments on outputAssume constant relative prices of goods
YL
XK
XO XL
YK
YO
Q
Xk
Yk
'YO
'YK
Yk
'Q
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The Rybczynski theoremIf relative commodity prices are constant and if both commodities continue to be produced, an increase in the supply of a factor will lead to an increase in the output of the commodity using that factor intensively and a decrease in the output of the other commodity.
In our example:• there was an increase in the supply of labor• labor is used intensively in the production of good X
X and Y