Stolper-Samuelson theorem
In the Heckscher-Ohlin model, suppose a relatively
capital-abundant country opens to trade. Who gains? Check all that
apply.
Multiple answers:You can select more than one option
A:
Workers
B:
Owners of capital
C:
The country as a whole
) State the Heckscher-Ohlin (H-O) Theorem, and explain what it
means. What are the initial assumptions? Use diagrams with PPFs,
indifference curves, and price lines to demonstrate the H-O theorem
and to show the existence of (A) Comparative advantage and (B)
Gains from trade. What happens to the production of each good in
each country under free trade as opposed to autarky?
Explain the H-O (standard model) of international trade. Using
the Stolper-Samuelson Theorem, explain what is expected to happen
to factor returns in the US following an expansion of international
trade. What implications does this have for inequality in the
US?
Find similarities and comparisons between the comparative
advantage and the Heckscher-Ohlin Model (Factor Proportions
Theory).
Present and explain at least one aspect to contrast these two
theories and one aspect of similarity between these two
theories.
1-Why Turkey has comparative advantage in some
industries, in terms of Heckscher – Ohlin approach to international
trade.
2-Design your own international trade policy concerning
Turkish economy.