Heckscher–Ohlin model

general equilibrium model of international trade by E. Heckscher and B. Ohlin, based on Ricardo's theory of comparative advantage

The Heckscher–Ohlin model (H–O model) is a general equilibrium mathematical model of international trade, developed by Eli Heckscher and Bertil Ohlin at the Stockholm School of Economics.

QuotesEdit

  • An important addition to this classical doctrine of factor-price equalisation has been supplied by Professor Bertil Ohlin. In his weighty Interregional and International Trade (1933), Ohlin has developed the highly interesting result that (1)free mobility of commodities in international trade can serve as a partial substitute for factor mobility and (2) will lead to a partial equalisation of relative (and absolute) factor prices. This important result, which we may call the Ohlin-Heckscher theorem, since Ohlin attributes it to a 1919 Swedish article by Professor E. F. Heckscher, has some foreshadowings in the literature of the last century.
    • Paul Samuelson, "International Trade and the Equalisation of Factor Prices", The Economic Journal, Vol. 58, No. 230. (Jun., 1948)

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