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The Validity of the Long‐run Heckscher–Ohlin Theorem in the Ricardian System
Author(s) -
Uchiyama Takashi
Publication year - 2005
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/j.1468-0335.2005.00439.x
Subject(s) - economics , comparative advantage , open economy , terms of trade , international economics , macroeconomics , international trade , monetary economics , exchange rate
Applying Burgstaller's Ricardian two‐sector growth model to the two‐country open economy, this paper shows that the long‐run Heckscher–Ohlin theorem holds also in a Ricardian world. In addition it is shown that, if two Ricardian countries that are different only in their demand parameters open trade, comparative advantage and the corresponding trade pattern at trade opening continue in the long run after the opening of trade.