Treflers case of missing trade, International Economics

Assignment Help:

Q. The Heckscher-Ohlin model is famous for being elegant and mathematically sophisticated, yet failing to define reality. One manifestation of this fact is Trefler's Case of Missing Trade. Illustrate what exactly is missing. In what sense is it missing? How could you explain why it is missing? How will a relaxation of the identical production functions explain the case of the missing trade?

Answer: Trefler demonstrated that the real volume of world trade is significantly less than that which would be predicted by the Heckscher-Ohlin model. One description is that North-South trade is especially less than would be predicted by a factor proportions model. If technologies be different in the poorer countries then it is possible that the cost of producing a product which uses relatively much of their abundant factor may still be higher than the cost of producing it in the other country.


Related Discussions:- Treflers case of missing trade

Welfare effects of tariff, Welfare Effects of Tariff can be understood as f...

Welfare Effects of Tariff can be understood as follows: It is important to understand what the welfare effects for the tariff are. While a tariff might seem desirable because i

Is a depreciation of the dollar/euro exchange rate, Is a depreciation of th...

Is a depreciation of the dollar/euro exchange rate correlated with a decrease in the dollar return on U.S. deposits? Answer:  No, suppose that the Interest Parity is maintained

Introduction-modelling, As the world seeks to find alternative means to pro...

As the world seeks to find alternative means to produce clean power, fuel cells emerge as a promising source of power generation. Depending on their type, fuel cells can be utilize

Discuss the hechscher-ohlin model, Q. Countries that are willing to toler...

Q. Countries that are willing to tolerate an unusually high quantity of pollution relative to their supplies of other factors would leads to export "pollution-intensive" goods. D

Independent variable, Foreign Direct Investment Theoretical Definition:...

Foreign Direct Investment Theoretical Definition: The causal (independent) variable is the inward Foreign Direct Investment (FDI) to the technology sector. Foreign direct i

Explains the sharply divergent long-run growth patterns, Q. What ex...

Q. What explains the sharply divergent long-run growth patterns? Answer: It lies in the political and economic features of developing countries and the way these have

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd