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Title: East is East and West is West: A Ricardian-Heckscher-Ohlin Model of Comparative Advantage

Citation Type: Miscellaneous

Publication Year: 2008

ISBN: 4169784375

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Abstract: This paper derives and estimates a unified and tractable model of comparative advantage due to differences in both factor abundance and relative productivity differences across industries. It derives conditions when ignoring one force for comparative advantage biases empirical tests of the other. I emphasize two empirical results. First, factor abundance-and relative productivity-based models each possess explanatory power. Second, productivity differences across industries are uncorrelated with the factor intensities of these industries. Therefore, the two models each offer valid partial descriptions of the data and ignoring one force for comparative advantage does not bias empirical tests of the other. JEL Codes: F10, F11, F12.

Url: https://pdfs.semanticscholar.org/2bc3/fed7845c890eeadd667efd1dbf0871ccb03d.pdf

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Authors: Morrow, Peter M

Publisher: University of Toronto

Data Collections: IPUMS USA

Topics: Methodology and Data Collection

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