In the Heckscher-Ohlin model, as trade occurs in a capital-abundant country, increased imports will force domestic...

 

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In the Heckscher-Ohlin model, as trade occurs in a capital-abundant country, increased imports will force domestic import- competing firms to decrease prices and production. Labor and capital will move to exporting firms. What will then happen to wages and returns to capital? In the Heckscher-Ohlin model, as trade occurs in a capital-abundant country, increased imports will force domestic import- competing firms to decrease prices and production. Labor and capital will move to exporting firms. What will then happen to wages and returns to capital?

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In the HeckscherOhlin model which is a theory of international trade based on comparative advantage ... View the full answer