01.06.2023 Heckscher-Ohlin Modell#

Assumptions#

  • trade occurs due to different resources

    • different relative abundance

  • and also other factors

  • two Countries: home / foreign

  • tow goods: coth / food

  • two factors: capital labor

    • fixed supply of both

    • mixed across goods

  • free capital / labor movement

Math#

Econmy with 2 Factors (L,K) and 2 Goods (Cotton, Food)

\[\begin{split} a_{Kf} Q_F + a_{Kc} Q_C \le K \\ a_{Lf} Q_F + a_{Lc} Q_C \le L \end{split}\]

\(a_{sector,product}\) = used amount of factour in sector

for given Restrictions:

  • \(3Q_F+6Q_C \le 2400\)

  • \(5Q_F+3Q_C\le 3000\)

Volume: \(V = P_C * Q_C + P_F * Q_F\)

  • slope of this: \(-\frac{P_C}{P_F}\)

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Heckschler Ohlin: both factors are interchangeable => smooth curve

  • optimum point: slope of Budget Restriction = Slope of Heckschler OHlin Curve

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Rybczynski: Amount of one factor rises => Quantity of Goods using this supply increases => Supply of other goods decreases

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Stolper-Samuelson: if Relative Price increases, real wage and price of most used factor price rises

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