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Essay / Research Paper Abstract
A 3 page paper discussing recent world-trade statistics and the product life cycle for manufactured goods. Other factors discussed are the Leontief paradox, Heckscher-Ohlin trade theory, and Ricardo trade theory in reference to international trade patterns. Bibliography lists 3 sources.
Page Count:
3 pages (~225 words per page)
File: CJ6_KS663923.rtf
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Unformatted sample text from the term paper:
arose to evaluate differentiations between countries in respect to their resources to determine their advantages, for purposes of discovering the most beneficial economic trade possibilities. English political economist David
Ricardo (1772-1823) first established the importance of comparative advantage as a fundamental part of trade in 1817. In 1919, Swedish economist Eli Heckscher (1879-1952) developed his theory of international
trade, refined by Bertil Ohlin (1899-1979) in 1933. The Hecksher-Ohlin theory "argued that comparative advantages were due to differences in "factor proportions"...in producing various commodities" (Klug, A., Young, W.,
Bordo, M.D., & Schiffman, D., 2006). Question 1: Leontief Paradox In Studies in the Structure of the American Economy in 1953, Wassily
Leontief (1905-1999) used the Heckscher-Ohlin theory to postulate "that since the United States was relatively abundant in capital compared to other nations, the United States would be an exporter of
capital-intensive goods and an importer of labor-intensive goods. To his surprise, however, he found that US exports were less capital intensive than US imports" (Heckscher-Ohlin Theory, n.d.).
This is the Leontief paradox, so named because observed results often are in conflict with the predictions that would arise from either the Heckscher-Ohlin or Ricardo
theories. The Leontief paradox demonstrates that the country holding the highest capital per worker has a lower capital-to-labor ratio in exports than it does in imports. Superficially this
does seem to be quite a paradox, but it is reasonable that a country with high capital per worker would be using that capital in ways that would produce higher
rates of return than could be possible when dedicating capital to labor. Question 2 Heckscher-Ohlin theory holds that nations will develop comparative advantage
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