An Account of Global Factor Trade
Donald R. Davis, David E. Weinstein
American Economic Review · 2001 · Volume 91 · Issue 5
Abstract
A half century of empirical work attempting to predict the factor content of trade in goods has failed to bring theory and data into congruence. Our study shows how the Heckscher-Ohlin-Vanek theory, when modified to permit technical differences, a breakdown in factor price equalization, the existence of nontraded goods, and costs of trade, is consistent with data from ten OECD countries and a rest-of-world aggregate.
Keywords
Neoclassical Models of Trade
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