Abstract
The opening quotation reflects the widespread view that the Heckscher-Ohlin model of international trade, with its emphasis on sectoral factor intensities, cannot fruitfully be used as a basis for detailed predictions in models of higher dimension than the textbook two-factor, two-commodity case. The purpose of the present chapter is not to dispute this viewpoint but rather to suggest that there nevertheless exists a method of aggregation that enables a limited role to be salvaged from the two-by-two HeckscherOhlin model as a predictor of comparative statics responses in more general models.
Those who continue to study factor intensities either do not understand the problem or they believe wrongly that factors can somehow be aggregated into two groups, capital and labour, without serious disturbance of the theory.
I. F. Pearce, International Trade, p. 482.
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© 1984 A. Ingham and A. M. Ulph
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Neary, J.P. (1984). The Heckscher-Ohlin Model as an Aggregate. In: Ingham, A., Ulph, A.M. (eds) Demand, Equilibrium and Trade. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-06358-1_4
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DOI: https://doi.org/10.1007/978-1-349-06358-1_4
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