Leontief paradox and the role of factor intensity measurement
Kwok, Yun-kwong and Yu, Eden S. H. 2005, Leontief paradox and the role of factor intensity measurement, in ACE 05 : Proceedings of the Australian Conference of Economists 2005, Blackwell, Carlton, Vic..
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Leontief paradox and the role of factor intensity measurement
In contrast with the prediction of the Heckscher-Ohlin (HO) theorem, Leontief (1953) found that the capital-labor ratio embodied in the US exports is smaller than the capital-labor ratio embodied in the US competitive import replacements. In Leontief's analysis, the measured factor content of US imports is computed based on the assumption that all countries are using the US factor intensity techniques. This paper relaxes all assumption of identical factor intensity techniques. It uses an inferring method to infer the factor intensity techniques of different countries based on international relative factor price differences. With the inferred differentiated factor intensity techniques , the Leontief paradox is re-investigated and is found to be either disappeared or eased.
ISBN
0734026080 9780734026088
Language
eng
Field of Research
140210 International Economics and International Finance
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