Description of the Heckscher Ohlin model ?

Question

description of the Heckscher Ohlin model ?

Answer 1

The Heckscher-Ohlin model is about factor prices across nations and factor endowment within nations.  Given two factors, within each country one will be relatively abundant and relatively scarce.  Thus, with no free trade, the abundant factor will be paid relatively low and the scarce factor relatively high.  With free trade, factor prices equalize across nations because they are competing in the world market, where they are no longer relatively abundant, so the price of the abundant factor increases and that of the scarce factor decreases.

Answer 2

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