The Leontief Paradox Redux

Kozo Kiyota

No 2020-018, Keio-IES Discussion Paper Series from Institute for Economics Studies, Keio University

Abstract: Shortly after Leamer (1980) found that the Leontief Paradox was based on a simple conceptual misunderstanding, Brecher and Choudhri (1982) argued that the fact that the United States exported labor services was, in itself, paradoxical because it is true if and only if its per-capita consumption is less than the world average. Surprisingly, however, no formal answer to this paradox has been provided for nearly four decades. This paper revisits this paradox and formally shows that the paradox can be resolved if the Heckscher-Ohlin-Vanek model takes into account technology differences across countries and trade imbalance. In contrast, the paradox cannot be resolved even if the analysis takes into account quasi-homothetic preferences, the Armington home bias, or offshoring.

Keywords: Leontief Paradox; Technology differences; Trade imbalance; Nonhomothetic preferences; Armington home bias; offshoring (search for similar items in EconPapers)
JEL-codes: F14 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2020-10-07
New Economics Papers: this item is included in nep-his, nep-int and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ies.keio.ac.jp/upload/pdf/en/DP2020-018.pdf (application/pdf)

Related works:
Journal Article: The Leontief Paradox Redux (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:keo:dpaper:2020-018

Access Statistics for this paper

More papers in Keio-IES Discussion Paper Series from Institute for Economics Studies, Keio University Contact information at EDIRC.
Bibliographic data for series maintained by Institute for Economics Studies, Keio University ().