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Abstract The chain version of the Heckscher-Ohlin theorem has only been tested by Cavusoglu and Elmslie (2005), with findings that fail to provide empirical support to its predictions. The present paper expands on that study and presents different results. Using data on capital-labor intensities, and exports and imports for ten manufacturing and three service sectors for the U.S. from 1970 to 2009, the predictions of the theory are confirmed by the data. These results are robust to different price indices, labor measures, and weight measures used to construct net export data. The difference in results between the two studies can be explained by the use of different capital stock data, as well as the longer time frame of the current study. [ABSTRACT FROM AUTHOR]

In a two-country infinite-horizon model, with two traded goods and two factors of production and no international borrowing and lending, there is no convergence of incomes if there is factor-price equalization. With factor-price equalization, the Euler equations of the two economies become identical. I show that in such a set-up if agents have a non-zero probability of death, then we do get convergence. In the steady state the two economies have identical capital–labor ratios and revert to autarky. [ABSTRACT FROM AUTHOR]

Abstract: This paper describes the process and results of an evaluation on an online game-based learning environment (GBLE) by focusing on learners’ motivational processing and cognitive processing. The goal is to explore how online GBLE might initiate and support learners’ goal-setting activities and impact learners’ cognitive loads. The study surveyed 144 undergraduate students after their autonomous participation in the online game available at the Nobel Prize Foundation website teaching the Heckscher–Ohlin Theory on international trade. Grounded in the integrative theory of motivation, volition, and performance (MVP), the evaluation indicated that participants felt significantly confident in learning the subject. The perceived satisfaction, however, was lower than the rest of motivational components possibly due to heavy cognitive processing. The finding of cognitive load reported that learners perceived a significantly higher level of intrinsic load than the germane load due to the novelty of the subject matter. Data analysis further indicated a significant canonical correlation between learners’ motivational and cognitive processing. This particular finding could inform future research to investigate specific motivational processing components’ effects on learners’ cognitive load levels in online GBLEs. [Copyright &y& Elsevier]

Using the Heckscher–Ohlin trade model, I refute two prominent but incorrect claims on virtual water trade. These claims are that virtual water trade (i) levels uneven water distribution, and (ii) reduces the potential for water conflict. Both claims are based on an incorrect understanding of comparative advantage in the production of water-intensive goods. The results show that both claims only hold under certain conditions, but do not necessarily follow from the Heckscher–Ohlin trade model. [Copyright &y& Elsevier]

Realization of comparative advantage (David Ricardo) raises issues of income distribution that emerge when specialization gains are achieved. While the Stolper-Samuelson theorem ‘predicts’ that because of trade liberalization in ‘rich countries’ like Austria or Germany wages may fall and real incomes of capital owners might increase, some doubts are raised whether continuous cuts in relative wages – as a response to specialization gains achieved in the process of trade liberalization – are an adequate policy response. The case of Austria illustrates the related issues. This case it not representative for the EU at large, a similar result can be expected for a few other EU countries, e.g. Germany. Other EU member states pursue different policies. [Copyright &y& Elsevier]

Abstract: This paper examines the optimal path of regional integration in the East Asian region from the perspective of Korea, as a country with an intermediate level of technology in the Asian region. Based on the welfare analysis of three types of FTA regimes between technologically asymmetric countries, this paper demonstrate that the optimal path of regional integration for the country with an intermediate technology level would be to form multiple bilateral FTAs, i.e., Hub and Spoke type FTA between technically asymmetric countries from the very initial stage. The second best regime is the multilateral Asia wide FTA. The worst case for a country with an intermediate technology would be to form a FTA with a country with advanced technologies, and extends the FTA with the less developed countries in the later stage. These results imply that the optimal strategy of regional integration for a country with an intermediate technology level, such as Korea, is to form a Hub and Spoke type FTA rather than a bilateral FTA with Japan followed by the participation of other Asian countries. The pre-requirement for the multiple bilateral FTAs is the fundamental industrial restructuring of the Korean industries, such as reallocating the human and economic resources from the sectors of comparative disadvantage to the sectors with comparative advantage. The successful FTAs assumes the nation-wide efforts involving the massive restructuring cost including the establishment of the social-safety net during the transition period. Moreover, the Asian type fiscal federalism is required for a genuine economic integration in the region. [Copyright &y& Elsevier]

This paper analyses trends in different components of trade of transition countries. To explain the cross-country differences, the paper points out the important distinction between the determinants of inter-industry trade and intra-industry trade (IIT), and horizontal and vertical IIT. Using varieties of gravity models, it is shown that variables from Increasing Returns Trade Theory, such as scale economies, similarity of income levels, and number of varieties produced play important roles in IIT, especially in horizontal IIT, whereas factors such as comparative advantage, dissimilarity in income levels, and having more developed trade partners from Heckscher–Ohlin Trade Theory are crucial in determining inter-industry trade and vertical IIT to a lesser degree. [Copyright &y& Elsevier]