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Essay / Research Paper Abstract
A 6 page paper providing a speech and answers to audience questions. The speech addresses Heckscher-Ohlin and Ricardo theories; the Leontief paradox; and Linder's explanations for international trade patterns. Questions address specific, ad valorem and compound tariffs. Bibliography lists 3 sources.
Page Count:
6 pages (~225 words per page)
File: CC6_KSeconHeck-Ohl.rtf
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Unformatted sample text from the term paper:
Heckscher (1879-1952) developed his theory of international trade in 1919; it was refined by Bertil Ohlin (1899-1979), another Swedish economist, in 1933. Though the theory has had detractors over
time, no one has been able to refute it. The theory states that the function and patterns of international trade are "based on a comparative cost advantage between countries
producing different goods" (Heckscher-Ohlin Trade Theory, n.d.). Question 1 Heckscher-Ohlin theory holds that nations will develop comparative advantage in trade in relation to
their factor endowments. Different nations possess different factor endowments such as available labor, arable land and energy resources, and in varying degrees. Heckscher-Ohlin theory maintains that the greater
the abundance of a factor endowment within a nation, the lower its cost will be. Inherent in this theory is that there are no differences in production methods, that
technology and labor efficiency have no bearing. David Ricardo (1772-1823) argued that there is value in trade even where there are disparities in
any or all areas, provided that the traders used what they have to their best advantage. Thus Ricardos theory holds that "comparative advantage arises from differences in productivity" (Voevodins
Library, n.d.). What nations possess in abilities and resources is not as important as how they use them. Of course in the
18th century Ricardo could not have envisioned an Internet-based supply chain or some of the other points of technology that we so take for granted today. It was the
rise of the Internet in the early 1990s that dramatically increased American worker productivity, however, directly contributing to the growth of the US economy in the decade of the 1990s.
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