The volume of trade in the smallest Heckscher-Ohlin model

Kwok Tong Soo ()

No 570270, Working Papers from Lancaster University Management School, Economics Department

Abstract: This paper develops the smallest model of international trade based on differences in factor endowments across countries. We use this model to clarify the result in Helpman and Krugman (1985) that relative country size does not matter for the volume of trade. Relative country size does matter for the volume of trade, holding relative endowments and the size of the world economy constant.

Keywords: International trade; Heckscher-Ohlin; trade volume. (search for similar items in EconPapers)
Date: 2005
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