Production in the Heckscher‐Ohlin‐Samuelson Model of International Trade Theory: A Simple Mathematical Treatment

Abstract

Using duality theory, we give a simple mathematical proof of some well‐known theorems of international trade theory. The two‐sector production model is described by a joint cost function from which the standard comparative statics results can be derived with little difficulty: all that is basically needed is the inversion of a Hessian matrix. This representation of the technology emphasises the importance of the assumption of non‐joint production, and it is useful for generalisation to many goods and factors, for treatment of intermediate products, and for empirical implementation.

Citation

Kohli, U. (1983), "Production in the Heckscher‐Ohlin‐Samuelson Model of International Trade Theory: A Simple Mathematical Treatment", Journal of Economic Studies, Vol. 10 No. 2, pp. 42-49. https://doi.org/10.1108/eb002556