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Trade Theory and Factor Intensities: An Interpretive Essay
Author(s) -
Jones Ronald W.
Publication year - 2002
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/1467-9396.00352
Subject(s) - economics , trade theory , commodity , neoclassical economics , production (economics) , distribution (mathematics) , international trade , new trade theory , positive economics , trade barrier , international economics , microeconomics , market economy , mathematical analysis , mathematics
Since Heckscher’s 1919 pioneering contribution to international trade theory, the concept of “factor intensity” has played a key role in explanations of trade patterns and the consequences of international trade for local income distribution. This essay discusses the uses that have been made of the concept and its applicability to problems that are couched in higher dimensions. The author suggests that it has an important role to play in “new” trade theory in which the strong link between commodity prices and costs of production may be removed by the existence of imperfectly competitive markets.