Hecksscher-Ohlin Model Essay

This quote by the renowned American economist Paul A. Samuelson positions Bertil Ohlin as one of the most influential economists of the twentieth century. Ohlin made several relevant contributions to economics, each of which laid the foundations for further research.
He took part in the development of monetary theory, by arguing that even in the situation of a large international monetary transfer, a country can maintain its macroeconomic equilibrium. This thesis was debated with J.M. Keynes in the context of the reparations, which Germany had to pay after the First World War (The German Reparations Problem, 1930). Additionally, Ohlin contributed to the development of macroeconomic theory together with other members of the Stockholm School,
The paper extends the Heckscher-Ohlin model, to include an analysis for situations in which geographical location and distance are significant. The authors utilise the Heckscher-Ohlin model to analyse different areas, within a country, with different trade patterns, such as export- or import-oriented. By doing this, they inspect the insinuations of distance for income and prices, the geographical choice of new activities, and the implications of changes in transport costs. The main finding of this research is the insufficiency of only factor endowments and factor intensities to predict the pattern of trade, somehow partially rejecting the standard Heckscher-Ohlin model. Transport intensity is also a crucial criterion regarding trade patterns, and should be analysed. High transport-intensity commodities would be made in proximity to the centre, and the joint impact of endowments and location would create geographical zones of specialisation. This research work has been published in the Journal of International Economics, with a Journal Impact Factor of 2.017 for 2016, more than twice than the benchmark of 1.000 (Thomson Reuters, 2017). Furthermore, with an Eigenfactor score of 0.017 for 2016, the Journal of International Economics ranks in the 90.0 percentile for
The paper attempts to explain the findings of Leontief (1953), while also refuting his justifications of the failure of the standard Heckscher-Ohlin model. By utilising the Heckscher-Ohlin model, Jones introduces a so called “magnification effect” to compensate for external variation of the prices of the two goods. This means that the model allows for more effective insight into changes in real wages real prices. Jones predicted that price changes of products can have a magnified effect on wages and capital investment, that needs to be compensated, to gain an accurate picture of alterations in purchasing power parity brought on by trade. According to Google Scholar, the article has been cited 319 times. The significance and influence of the paper are demonstrated by the high Journal Impact Factor and Eigenfactor scores of Review of Economic Studies, where it was