国际经济学基础Chapter 4
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FIGURE 4.3 General Equilibrium Framework of the Heckscher-Ohlin Theory.
17
Table 4.1 H-O Theory: U.S.- China Trade
Higher Skill Skill Group China Exports (Key Industries) to U.S. (%) Periodicals, office and 4.8 computing machines Aircraft and Parts 2.6 Engines and turbines 3.9 Concrete, nonelectric 11.5 Watches, clocks, toys 18.9 Wood buildings, basic steel 8.2 Furniture and fixture 4.1 Cigarettes, motor vehicles, 5.2 Weaving, wool, leather 17.2 Children’s outwear, 23.5 nonrubber footwear U.S. Exports to China (%) 7.7 48.8 21.3 4.3 6.3 1.3 2.8 1.8 0.4 5.2
12
4.3 The Formal Heckscher-Ohlin Model
Suppose there are two countries with identical technology and societal preferences. The nations differ in that one is relatively labor abundant (nation 1) while the other (nation 2) is relatively capital abundant. Further, the commodities produced differ in factor intensity. (X has the greater K/L ratio per unit of production, so X is the Lintensive product.)
Nation 2 is capital abundant if TK/TL is greater, and r/w is lower than nation 1.
11
The Determinant of Comparative Advantage
The difference in relative factor abundance and prices is the cause of the pre-trade difference in relative commodity prices between two nations.
13
FIGURE 4.1 The Shape of the Production Frontiers of Nation 1 and Nation 2.
14
FIGURE 4.2 The HeckscherOhlin Model.
15
The Different Tastes
The tastes of the 2 nations could be different in such a way as to make mutually beneficial trade impossible. (assignments 1) H-O theory dose not require identical tastes in the 2 nations. It only requires that they be broadly similar, so that if its is the difference in factor of supplies or endowments among nations that is the primary cause of the difference in relative commodity prices and trade among them.
– Relative factor abundance (refer to countries) – Relative factor intensity (refer to goods) – It also referred to as the factor-proportions theory
8
I.
– Difference in relative factor & relative commodity prices translated into a difference in absolute factor & commodity prices. – The immediate cause of trade: the difference in absolute commodity prices.
4
4.2 Factor Endowments and the Heckscher-Ohlin Theory
The Heckscher-Ohlin (H-O) theory is based on two subsidiary theorems:
– The H-O theorem
A nation will export the commodity whose production requires the intensive use of the nation’s relatively abundant (and therefore, cheap) factor and import the commodity whose production requires the intensive use of the nation’s relatively scarce (and therefore, expensive) factor. In other words, relative factor abundance drives comparative advantage and the pattern of trade.
– The factor price equalization theorem
5
Assumption of the Theory and the Meaning
1. 2.
3.
4. 5. 6.
2×2×2 model Same technology X is labor intensive and commodity Y is capital intensive in both nations Constant returns to scale Incomplete specialization Tastes are equal
2
4.1 Introduction
What determines comparative advantage? What effect dose international trade have on the earnings of various factors of production (distribution of income) in trading nations? Other trade theories, models beyond the standard model of international trade are considered.
7
Factor Intensive, Factor Abundance
The Heckscher-Ohlin theory:
– Emphasizes resource differences as the only source of trade
Shows that comparative advantage is influenced by:
Factor Intensity
Factor Intensity Refer to the relative amounts of capital and labor used in the production of a good. If the capital-labor intensive ratio (K/L) used in the production of Y is greater than K/L for X in both nations, then commodity Y is capitalintensive.
6
Assumption of the Theory and the Meaning (cont’d)
7. 8.
9. 10. 11.
Perfect competition Perfect factor mobility within each nation, but no international factor mobility. No obstructions to the free flow of international trade. All resources are fully employed. Balanced international trade
10
II. Factor Abundance (factor endowments)
Factor abundance is the resource richness of nations. Two ways to define:
1.physical units TK/TL (T-total amount), not the absolute amount, but ratio 2.Relative factor price PK/PL=r/w (r-interests rate, the rental price of capital; w-wage, the labor price)
3
Theories of international trade
The theories that will be considered are:
– The Heckscher-Ohlin model of trade – An economy of scale model of trade – A product differentiation model of trade – A product cycle model of trade – A transportation cost model of trade – A environmental standards model of trade
9
Factor Intensity (cont’d)
பைடு நூலகம்
Suppose that Y needs 2K, 2L to produce, what is the K/L? K/L for Y=2/2=1; If X needs 1K, 4L, K/L for X=1/4. Now if X needs 3K, 12L, K/L forX=3/12=1/4 Note even 3K>2K, 12L>2L, the K/L ration for X is still smaller than Y, 4/1<1. Not the absolute amount but the ratio is the index of factor intensity!
Chapter 4
The Heckscher-Ohlin and Other Trade Theories
1
Contents
4.1 Introduction 4.2 Factor Endowments and the Heckscher-Ohlin Theory 4.3 The Formal Heckscher-Ohlin Model 4.4 Factor-Price Equalization and Income Distribution 4.5 Economic of Scale and International Trade 4.6 Trade based on Product Differentiation 4.7 Technological Gap and Product Cycle Models 4.8 Transportation Costs and International Trade 4.9 Environment Standards and International Trade
FIGURE 4.3 General Equilibrium Framework of the Heckscher-Ohlin Theory.
17
Table 4.1 H-O Theory: U.S.- China Trade
Higher Skill Skill Group China Exports (Key Industries) to U.S. (%) Periodicals, office and 4.8 computing machines Aircraft and Parts 2.6 Engines and turbines 3.9 Concrete, nonelectric 11.5 Watches, clocks, toys 18.9 Wood buildings, basic steel 8.2 Furniture and fixture 4.1 Cigarettes, motor vehicles, 5.2 Weaving, wool, leather 17.2 Children’s outwear, 23.5 nonrubber footwear U.S. Exports to China (%) 7.7 48.8 21.3 4.3 6.3 1.3 2.8 1.8 0.4 5.2
12
4.3 The Formal Heckscher-Ohlin Model
Suppose there are two countries with identical technology and societal preferences. The nations differ in that one is relatively labor abundant (nation 1) while the other (nation 2) is relatively capital abundant. Further, the commodities produced differ in factor intensity. (X has the greater K/L ratio per unit of production, so X is the Lintensive product.)
Nation 2 is capital abundant if TK/TL is greater, and r/w is lower than nation 1.
11
The Determinant of Comparative Advantage
The difference in relative factor abundance and prices is the cause of the pre-trade difference in relative commodity prices between two nations.
13
FIGURE 4.1 The Shape of the Production Frontiers of Nation 1 and Nation 2.
14
FIGURE 4.2 The HeckscherOhlin Model.
15
The Different Tastes
The tastes of the 2 nations could be different in such a way as to make mutually beneficial trade impossible. (assignments 1) H-O theory dose not require identical tastes in the 2 nations. It only requires that they be broadly similar, so that if its is the difference in factor of supplies or endowments among nations that is the primary cause of the difference in relative commodity prices and trade among them.
– Relative factor abundance (refer to countries) – Relative factor intensity (refer to goods) – It also referred to as the factor-proportions theory
8
I.
– Difference in relative factor & relative commodity prices translated into a difference in absolute factor & commodity prices. – The immediate cause of trade: the difference in absolute commodity prices.
4
4.2 Factor Endowments and the Heckscher-Ohlin Theory
The Heckscher-Ohlin (H-O) theory is based on two subsidiary theorems:
– The H-O theorem
A nation will export the commodity whose production requires the intensive use of the nation’s relatively abundant (and therefore, cheap) factor and import the commodity whose production requires the intensive use of the nation’s relatively scarce (and therefore, expensive) factor. In other words, relative factor abundance drives comparative advantage and the pattern of trade.
– The factor price equalization theorem
5
Assumption of the Theory and the Meaning
1. 2.
3.
4. 5. 6.
2×2×2 model Same technology X is labor intensive and commodity Y is capital intensive in both nations Constant returns to scale Incomplete specialization Tastes are equal
2
4.1 Introduction
What determines comparative advantage? What effect dose international trade have on the earnings of various factors of production (distribution of income) in trading nations? Other trade theories, models beyond the standard model of international trade are considered.
7
Factor Intensive, Factor Abundance
The Heckscher-Ohlin theory:
– Emphasizes resource differences as the only source of trade
Shows that comparative advantage is influenced by:
Factor Intensity
Factor Intensity Refer to the relative amounts of capital and labor used in the production of a good. If the capital-labor intensive ratio (K/L) used in the production of Y is greater than K/L for X in both nations, then commodity Y is capitalintensive.
6
Assumption of the Theory and the Meaning (cont’d)
7. 8.
9. 10. 11.
Perfect competition Perfect factor mobility within each nation, but no international factor mobility. No obstructions to the free flow of international trade. All resources are fully employed. Balanced international trade
10
II. Factor Abundance (factor endowments)
Factor abundance is the resource richness of nations. Two ways to define:
1.physical units TK/TL (T-total amount), not the absolute amount, but ratio 2.Relative factor price PK/PL=r/w (r-interests rate, the rental price of capital; w-wage, the labor price)
3
Theories of international trade
The theories that will be considered are:
– The Heckscher-Ohlin model of trade – An economy of scale model of trade – A product differentiation model of trade – A product cycle model of trade – A transportation cost model of trade – A environmental standards model of trade
9
Factor Intensity (cont’d)
பைடு நூலகம்
Suppose that Y needs 2K, 2L to produce, what is the K/L? K/L for Y=2/2=1; If X needs 1K, 4L, K/L for X=1/4. Now if X needs 3K, 12L, K/L forX=3/12=1/4 Note even 3K>2K, 12L>2L, the K/L ration for X is still smaller than Y, 4/1<1. Not the absolute amount but the ratio is the index of factor intensity!
Chapter 4
The Heckscher-Ohlin and Other Trade Theories
1
Contents
4.1 Introduction 4.2 Factor Endowments and the Heckscher-Ohlin Theory 4.3 The Formal Heckscher-Ohlin Model 4.4 Factor-Price Equalization and Income Distribution 4.5 Economic of Scale and International Trade 4.6 Trade based on Product Differentiation 4.7 Technological Gap and Product Cycle Models 4.8 Transportation Costs and International Trade 4.9 Environment Standards and International Trade