2009 | OriginalPaper | Chapter
A Modified Heckscher-Ohlin Theorem Under Quasilinear Utility Functions
Authors : Junko Doi, Kenji Fujiwara, Toru Kikuchi, Koji Shimomura
Published in: International Trade and Economic Dynamics
Publisher: Springer Berlin Heidelberg
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Constructing a two-country, two-good, two-factor model of international trade under quasilinear utility functions, we prove a modified Heckscher-Ohlin (MHO) theorem which relates trade patterns to the international distribution of factor endowments in a manner that has parallels with the standard HO theorem. The MHO theorem survives imperfect competition, increasing returns and externalities.