Testing Trade Theory in Ohlin's Time / Antoni Estevadeordal, Alan M. Taylor.

By:

Estevadeordal, Antoni

Contributor(s):

Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w8842.Publication details: Cambridge, Mass. National Bureau of Economic Research 2002.Description: 1 online resource: illustrations (black and white)Subject(s):

Online resources:

Available additional physical forms:

Hardcopy version available to institutional subscribers

Abstract: An empirical tradition in international trade seeks to establish whether the predictions of factor abundance theory match present-day data. In the analysis of goods trade and factor endowments, mildly encouraging results were found by Leamer et al. But ever since the appearance of Leontief's paradox, the measured factor content of trade has always been found to be far smaller than its predicted magnitude in the Heckscher-Ohlin-Vanek framework, the so-called 'missing trade' mystery. We wonder if this problem was there in the theory from the beginning. This seems like a fairer test of its creators' original enterprise. We apply contemporary tests to historical data on goods and factor trade from Ohlin's time. Our analysis is set in a very different context than contemporary studies -- an era with lower trade barriers, higher transport costs, a more skewed global distribution of the relevant factors (especially land), and comparably large productivity divergence. We find some support for the theory, but also encounter common problems. Our work thus complements the tests applied to today's data and informs our search for improved models of trade.

Tags from this library: No tags from this library for this title. Log in to add tags.

Average rating: 0.0 (0 votes)

Holdings
Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w8842 (Browse shelf(Opens below))	Not For Loan

Total holds: 0

Collection: Colección NBER Close shelf browser (Hides shelf browser)

Previous	No cover image available	No cover image available	No cover image available	No cover image available	No cover image available	No cover image available	No cover image available	Next
Previous	nber w8839 The Fed and Interest Rates: A High-Frequency Identification /	nber w8840 Removing the Veil of Ignorance in Assessing the Distributional Impacts of Social Policies /	nber w8841 How Much Should We Trust Differences-in-Differences Estimates? /	nber w8842 Testing Trade Theory in Ohlin's Time /	nber w8843 The Measure of Man and Older Age Mortality: Evidence from the Gould Sample /	nber w8844 The Impact of Lending, Borrowing, and Anti-Smoking Policies on Cigarette Consumption by Teens /	nber w8845 Subsidizing the Stork: New Evidence on Tax Incentives and Fertility /	Next

March 2002.

An empirical tradition in international trade seeks to establish whether the predictions of factor abundance theory match present-day data. In the analysis of goods trade and factor endowments, mildly encouraging results were found by Leamer et al. But ever since the appearance of Leontief's paradox, the measured factor content of trade has always been found to be far smaller than its predicted magnitude in the Heckscher-Ohlin-Vanek framework, the so-called 'missing trade' mystery. We wonder if this problem was there in the theory from the beginning. This seems like a fairer test of its creators' original enterprise. We apply contemporary tests to historical data on goods and factor trade from Ohlin's time. Our analysis is set in a very different context than contemporary studies -- an era with lower trade barriers, higher transport costs, a more skewed global distribution of the relevant factors (especially land), and comparably large productivity divergence. We find some support for the theory, but also encounter common problems. Our work thus complements the tests applied to today's data and informs our search for improved models of trade.