Who Gains and Who Loses within a Country
Who Gains and Who Loses from Trade?
- Who Gains and Who Loses from Trade?
Chapter 5
Who Gains and Who Loses from Trade?
Who Gains and Who Loses from Trade? This chapter has two major purposes. First, it examines the implications for factor incomes of trade that follows the Heckscher-Ohlin (H-O) theory. Second, it examines the empirical evidence on the Heckscher-Ohlin theory and some of its implications. The implications of H-O trade for factor incomes follow from the pressures for changes in production levels as a country shifts from no trade to free trade.
Slide24
知识点7
案例4
习题60
Knowledge Points
知识点
Three Implications of the H-O Theory
This chapter has two major purposes. First, it examines the implications for factor incomes of trade that follows the Heckscher-Ohlin (H-O) theory. Second, it examines the empirical evidence on the Heckscher-Ohlin theory and some of its implications.
- Heckscher-Ohlin Model
- The Stolper-Samuelson theorem
- The specialized-factor pattern
Does Heckscher-Ohlin Explain Actual Trade Patterns?
The chapter then shifts to examine empirical evidence on the Heckscher-Ohlin theory. The box “The Leontief Paradox” summarizes the early tests. The text emphasizes the kinds of information that we need to examine real-world trade patterns—factor endowments and trade patterns, along with knowledge of the factor proportions used in producing different products.
- The Heckscher-Ohlin approach to trade provides important insights, in theory, about the gains from trade, the effects of trade on production and consumption, and the effects of trade on the incomes of production factors. These insights are based on the hunch by Heckscher and Ohlin about the basis for trade—why countries export some products and import others.
Short-Run Effects of Opening Trade
Generally, the H-O approach has three major implications for factor incomes. First, the conclusion about the effect of opening to free trade is an example of the more general Stolper-Samuelson theorem—the real return to the factor used intensively in the rising-price industry increases, and the real return to the factor used intensively in the falling-price industry declines.
- In the short run, with factors of production tied to their current lines of production, gains and losses are divided by output sector. All factors tied to the rising sector gain, and all factors tied to the declining sector lose.
- In the U.S., owners of land and labor in the wheat sector are expected to gain, and owners of land and labor in the cloth sector are expected to lose.
The Long-Run Factor-Price Response
In the long run, the period of time that is emphasized by the Heckscher-Ohlin approach, factors can easily move between sectors. The implications for factor incomes then depend on the factors demanded by the expanding sector relative to the factors released by the contracting industry. According to the H-O theory, the expanding sector is intensive in the country's abundant factor, while the shrinking sector is intensive in the country's scarce factor.
- In the long run, factors can move between sectors in response to differences in returns.
- In the long run, wage rates end up lower for all U.S. workers and higher for all foreign workers (each relative to its level with no trade). All land rents end up higher in the U.S. and lower in the Rest of the World (each relative to its level with no trade). Why?
How Free Trade Affects Income Distribution in the Long Run
In the long run, the period of time that is emphasized by the Heckscher-Ohlin approach, factors can easily move between sectors. The implications for factor incomes then depend on the factors demanded by the expanding sector relative to the factors released by the contracting industry. According to the H-O theory, the expanding sector is intensive in the country's abundant factor, while the shrinking sector is intensive in the country's scarce factor.
The Stolper-Samuelson Theorem
Generally, the H-O approach has three major implications for factor incomes. First, the conclusion about the effect of opening to free trade is an example of the more general Stolper-Samuelson theorem—the real return to the factor used intensively in the rising-price industry increases, and the real return to the factor used intensively in the falling-price industry declines.
- Heckscher-Ohlin Model
- The Stolper-Samuelson theorem
- The specialized-factor pattern
Cases
案例与情境
The chapter then shifts to examine empirical evidence on the Heckscher-O ...
The chapter then shifts to examine empirical evidence on the Heckscher-Ohlin theory. The box “The Leontief Paradox” summarizes the early tests. The text emphasizes the kinds of information that we need to examine real-world trade patterns—factor endowments and trade patterns, along with knowledge of the factor proportions used in producing different products.
查看原始摘录
The chapter then shifts to examine empirical evidence on the Heckscher-Ohlin theory. The box “The Leontief Paradox” summarizes the early tests. The text emphasizes the kinds of information that we need to examine real-world trade patterns—factor endowments and trade patterns, along with knowledge of the factor proportions used in producing different products. It provides evidence on endowments for seven factors—physical capital, highly skilled labor, medium-skilled labor, unskilled labor, crop land, pasture land, and forest land, and it discusses endowments of other natural resources. The examination of the U.S. pattern of international trade suggests that some of its trade seems consistent with the H-O predictions, but some also does not seem consistent. In general, trade patterns for the United States and other countries match the H-O theory reasonably well but not perfectly. (The box
1. Mexico is abundant in unskilled labor and scarce in skilled ...
1. Mexico is abundant in unskilled labor and scarce in skilled labor relative to the United States or Canada. With freer trade Mexico exports a greater volume of unskilled-labor-intensive products and imports a greater volume of skilled-labor-intensive products. According to the Stolper–Samuelson theorem, a shift toward freer trade then increases the real wage of unskilled labor in Mexico, reduces the real wage of unskilled labor in the United States or Canada, decreases the real wage of skilled labor in Mexico, and increases the real wage of skilled labor in the United States or Canada.
查看原始摘录
1. Mexico is abundant in unskilled labor and scarce in skilled labor relative to the United States or Canada. With freer trade Mexico exports a greater volume of unskilled-labor-intensive products and imports a greater volume of skilled-labor-intensive products. According to the Stolper–Samuelson theorem, a shift toward freer trade then increases the real wage of unskilled labor in Mexico, reduces the real wage of unskilled labor in the United States or Canada, decreases the real wage of skilled labor in Mexico, and increases the real wage of skilled labor in the United States or Canada.
According to the H-O approach and the Stolper-Samuelson theorem, the fac ...
According to the H-O approach and the Stolper-Samuelson theorem, the factors that gain from free trade are those that are used intensively in export-oriented production, while the factors that lose are those used intensively in import-competing production. The chapter presents evidence on the factor content of export and import-competing production in the United States and Canada, along with brief comments about other countries.
查看原始摘录
According to the H-O approach and the Stolper-Samuelson theorem, the factors that gain from free trade are those that are used intensively in export-oriented production, while the factors that lose are those used intensively in import-competing production. The chapter presents evidence on the factor content of export and import-competing production in the United States and Canada, along with brief comments about other countries.
5. Leontief conducted his research shortly after World War II, when ...
5. Leontief conducted his research shortly after World War II, when it seemed clear that the United States was abundant in capital and scarce in labor, relative to the rest of the world. According to the Heckscher–Ohlin theory, the United States then should export capital-intensive products and import labor-intensive products.
查看原始摘录
5. Leontief conducted his research shortly after World War II, when it seemed clear that the United States was abundant in capital and scarce in labor, relative to the rest of the world. According to the Heckscher–Ohlin theory, the United States then should export capital-intensive products and import labor-intensive products. But in his empirical work using data on production in the United States and U.S. trade flows, Leontief found that the United States exported relatively labor-intensive products and imported relatively capital-intensive products.
Exercises
习题与答案
题目 1Who Gains and Who Loses within a Country
Which of the following statements is true?
- A) Free trade causes contraction of the export-oriented sector.
- B) Free trade causes contraction in the import-competing sector.
- C) Free trade restricts consumption choices of domestic consumers.
- D) All domestic producers benefit when a country engages in free trade.
正确答案：B | Free trade causes contraction in the import-competing sector.
难度：1 Easy Bloom's：Remember
题目 2Who Gains and Who Loses within a Country
In the short-run, following the opening of trade
- A) workers in the country can change jobs but will receive the same wage.
- B) workers will suffer from lower wages, but landowners will benefit from higher rents.
- C) groups tied to declining sectors of the economy will suffer from lower returns.
- D) gross output remains constant.
正确答案：C | groups tied to declining sectors of the economy will suffer from lower returns.
难度：2 Medium Bloom's：Understand
题目 3Who Gains and Who Loses within a Country
In the short-run, following the opening of trade
- A) inputs move across sectors, but input returns remain constant.
- B) factor payments in the import-competing sectors will decline.
- C) the supply of resources to the export-oriented sectors will decline.
- D) workers in all sectors will receive lower wages due to cheap imports.
正确答案：B | factor payments in the import-competing sectors will decline.
难度：1 Easy Bloom's：Remember
题目 4Who Gains and Who Loses within a Country
The theory which predicts that trade occurs because of differences in the availability of factor inputs across countries and the differences in the proportions in which the inputs are used in producing different products is called
- A) the Stolper-Samuelson theory.
- B) the Heckscher-Ohlin theory.
- C) the theory of comparative advantage.
- D) the theory of factor price equalization.
正确答案：B | the Heckscher-Ohlin theory.
难度：1 Easy Bloom's：Remember
题目 5Who Gains and Who Loses within a Country
If trade corresponds to the Heckscher-Ohlin theory, which of the following is most likely to happen in the long run after a labor-abundant country engages in free trade?
- A) The rate of unemployment in the country is most likely to increase.
- B) The total output in the economy will decline.
- C) The capital to labor ratio used in production in the export sector will increase.
- D) The rental rates of capital will increase but the wage rates will decline.
正确答案：C | The capital to labor ratio used in production in the export sector will increase.
难度：2 Medium Bloom's：Understand
题目 6Who Gains and Who Loses within a Country
The Heckscher-Ohlin theory predicts that the opening of trade between a land-abundant country and a labor-abundant country should result in
- A) higher rents and wages in both countries.
- B) lower rents and wages in both countries.
- C) higher rents in the labor-abundant country and higher wages in the land-abundant country.
- D) higher wages in the labor-abundant country and higher rents in the land-abundant country.
正确答案：D | higher wages in the labor-abundant country and higher rents in the land-abundant country.
难度：1 Easy Bloom's：Remember
题目 7Who Gains and Who Loses within a Country
Country A is relatively land-abundant, and wheat is relatively land-intensive. Given the assumptions of the Heckscher-Ohlin model, the opening of trade by this country will cause the domestic price of wheat to
- A) fall.
- B) rise.
- C) remain unaffected.
- D) rise at first, but then fall back to its original level.
正确答案：B | rise.
难度：2 Medium Bloom's：Understand
题目 8Three Implications of the H-O Theory
The Stolper-Samuelson theorem indicates that, after a country shifts to free trade
- A) the real return to the factor used intensively in the import-competing industry will rise in the long run.
- B) the real return to the factor used intensively in the export industry will fluctuate around a long-run trend.
- C) the real return to all the resources in an economy will increase.
- D) the real return to the factor used intensively in the export industry will rise in the long run.
正确答案：D | the real return to the factor used intensively in the export industry will rise in the long run.
难度：1 Easy Bloom's：Remember
题目 9Three Implications of the H-O Theory
Let's assume that cloth-making (labor-intensive) and farming (land-intensive) are the only two sectors of production in a country. If this country is labor-abundant, and if trade corresponds to the Heckscher-Ohlin theory, which of the following groups will gain in the short run, but lose in the long run, from the opening of trade?
- A) Domestic landowners in the domestic farming sector
- B) Domestic landowners in the domestic cloth-making sector
- C) Foreign landowners in the foreign farming sector
- D) Foreign workers in the foreign cloth-making sector
正确答案：B | Domestic landowners in the domestic cloth-making sector
难度：3 Hard Bloom's：Analyze
题目 10Three Implications of the H-O Theory
The Stolper-Samuelson theorem predicts that free trade between the United States, a capital-abundant country, and Mexico, a labor-abundant country, would ultimately result in
- A) higher wages in both countries.
- B) lower wages in both countries.
- C) higher wages in Mexico and lower wages in the United States.
- D) lower wages in Mexico and higher wages in the United States.
正确答案：C | higher wages in Mexico and lower wages in the United States.
难度：1 Easy Bloom's：Remember
题目 11Three Implications of the H-O Theory
According to the factor-price equalization theorem, free trade between any two countries equalizes
- A) product prices as well as the prices of individual factors of production between the countries.
- B) product prices between the countries but not the prices of individual factors of production.
- C) product prices between the countries and factor prices within each country but not between the countries.
- D) average national income per person in the countries.
正确答案：A | product prices as well as the prices of individual factors of production between the countries.
难度：1 Easy Bloom's：Remember
题目 12Three Implications of the H-O Theory
The factor-price equalization theorem tells us that free trade between two countries should result in
- A) all workers in the two countries earning the same wage rate.
- B) all workers in the two countries having the same skill level.
- C) all workers of the same skill level earning the same wage rate in the two countries.
- D) all input prices being equal within each country.
正确答案：C | all workers of the same skill level earning the same wage rate in the two countries.
难度：1 Easy Bloom's：Remember
Manual Preview
教师手册摘录
Who Gains and Who Loses from Trade?
This chapter has two major purposes. First, it examines the implications for factor incomes of trade that follows the Heckscher-Ohlin (H-O) theory. Second, it examines the empirical evidence on the Heckscher-Ohlin theory and some of its implications.
The implications of H-O trade for factor incomes follow from the pressures for changes in production levels as a country shifts from no trade to free trade. The export-oriented sector tries to expand production, as the relative price of the exportable good increases. The import-competing sector shrinks its production, as the relative price of the importable good decreases. In the short run, production factors cannot move easily between sectors. Therefore, in the short run, many or all factors employed in the export industry benefit from strong demand for their services and gain income. In the short run, many or all factors employed in the import-competing industry suffer from reduced demand for their services and lose income.
In the long run, the period of time that is emphasized by the Heckscher-Ohlin approach, factors can easily move between sectors. The implications for factor incomes then depend on the factors demanded by the expanding sector relative to the factors released by the contracting industry. According to the H-O theory, the expanding sector is intensive in the country's abundant factor, while the shrinking sector is intensive in the country's scarce factor. In the shift to free trade, there is strong demand for the abundant factor (relative to the small amount released as the import-competing sector shrinks), and there is weak demand for the scarce factor (relative to the large amount released as the import-competing sector shrinks.) The shift to free trade increases the price and income of the abundant factor, and it decreases the price and income of the scarce factor. (The box “A Factor-Ratio Paradox” is difficult for some students, but it does show how full employment can be reached after the shift, as each sector alters the proportions in which it uses factors in response to the change in factor prices.)
Slide Outline
课件线索
- Short-Run Effects of Opening Trade
- The Long-Run Factor-Price Response
- How Free Trade Affects Income Distribution in the Long Run
- Three Implications of the
- The Stolper-Samuelson Theorem
- A Factor-Ratio Paradox
- The Specialized-Factor Pattern
- The Factor-Price Equalization Theorem
- Does Heckscher-Ohlin Explain Actual Trade Patterns?
- What Are the Export-Oriented and Import-Competing Factors?
- What are the Export-Oriented and Import-Oriented Factors?
- Do Factor Prices Equalize Internationally?
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