Ronald Jones, in his seminal paper (1957) on Heckscher-Ohlin theory, has argued that, for the case of two countries, two factors, and several commodities, the Heckscher-Ohlin theorem would remain valid in the following weak sense: "Ordering the commodities with respect to the capital-labor ratios employed in production is to rank them in order of comparative advantage. Demand conditions merely determine the dividing line between exports and imports; it is not possible to break the chain of comparative advantage by exporting, say, the third and fifth commodities and importing the fourth when they are ranked by factor intensity" (p. 85).
It is easy to show, however, that this proposition, although correct for the case where factor prices are not equalized, is untenable as literally stated. When factor-price equalization is realized, a not unimportant case, a variety of crisscrossings are possible.
Labor Economics | Law | Political Economy
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Jagdish N. Bhagwati,
The Heckscher-Ohlin Theorem in the Multi-Commodity Case,
J. Pol. Econ.
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