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American Economic Review: Vol. 91 No. 5 (December 2001)


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An Account of Global Factor Trade

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Davis, Donald R., and David E. Weinstein. 2001. "An Account of Global Factor Trade." American Economic Review, 91(5): 1423-1453.

DOI: 10.1257/aer.91.5.1423


A half century of empirical work attempting to predict the factor content of trade in goods has failed to bring theory and data into congruence. Our study shows how the Heckscher-Ohlin-Vanek theory, when modified to permit technical differences, a breakdown in factor price equalization, the existence of nontraded goods, and costs of trade, is consistent with data from ten OECD countries and a rest-of-world aggregate.

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Davis, Donald R. (Columbia U and NBER)
Weinstein, David E. (Columbia U and NBER)

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F11: Neoclassical Models of Trade

American Economic Review

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