Publications

 
The Heckscher-Ohlin model 
The Heckscher-Ohlin model was built to replace Ricardo's 
basic model of comparative advantage. Although it is more 
complex and more predictive, it still has an idealization. It is 
the abandonment of labor value theory and the attachment of 
the neoclassical price mechanism to the theory of 
international trade. The Hechscher-Ohlin model argues that 
the structure of international trade is determined by 
differences among resource factors. It predicts that a country 
will export resource -intensive products in which it is strong, 
and import resource -intensive products in which it is scarce. 
However, many studies to test the HO model have produced 
conflicting results, including the work of Wassili Leontief, 
also known as the Leontief Paradox. Using his IO (input-
output) interdisciplinary balance sheet model with US data 
in 1947, Leontief found that the US, despite being a country 
with a high capital/labor ratio, has a high capital/labor ratio. 
of equivalent US imports is higher than the capital/labor 
ratio of exports. 
 
Gravity model 
Compared with the above theoretical models, the gravity 
model is more inclined to quantitative analysis. In its 
simplest form, the gravity model predicts that trade depends 
on the distance between two countries and the size of the 
two economies. The model follows Newton 's law of 
universal gravitation, which states that the force of attraction 
between two objects depends on the distance between them 
and the mass of each. The model has been shown to be 
relatively strong quantitatively through 
econometric 
analyses. Extended forms of this model take into account 
many other factors such as income levels, diplomatic 
relations between the two countries, and each country's trade 
policy.