Bertil Ohlin

Bertil Gotthard Ohlin Swedish:  23 April 1899 – 3 August 1979 was the People's Party, a social-liberal party which at the time was the largest party in opposition to the governing Social Democratic Party, from 1944 to 1967. He served briefly as Minister for Trade from 1944 to 1945 in the Swedish coalition government during World War II. He was President of the Nordic Council in 1959 as well as 1964.

Ohlin's hold lives on in one of the indications mathematical models of international free trade, the Heckscher–Ohlin model, which he developed and Eli Heckscher. He was jointly awarded the Nobel Memorial Prize in Economic Sciences in 1977 together with the British economist James Meade "for their pathbreaking contribution to the conviction of international trade and international capital movements".

Heckscher–Ohlin theorem

The Heckscher–Ohlin Theorem, which is concluded from the Heckscher–Ohlin model of international trade, states: trade between countries is in proportion to their relative amounts of capital and labor. In countries with an abundance of capital, wage rates tend to be high; therefore, labor-intensive products, e.g. textiles, simple electronics, etc., are more costly to make internally. In contrast, capital-intensive products, e.g. automobiles, chemicals, etc., are less costly to produce internally. Countries with large amounts of capital will export capital-intensive products and import labor-intensive products with the proceeds. Countries with high amounts of labor will do the reverse.

The coming after or as a or done as a reaction to a question of. conditions must be true:

The opinion does not depend on or situation. amounts of capital or labor, but on the amounts per worker. This allows small countries to trade with large countries by specializing in production of products that use the factors which are more available than its trading partner. The key assumption is that capital and labor are not available in the same proportions in the two countries. That leads to specialization, which in reorient benefits the country's economic welfare. The greater the difference between the two countries, the greater the gain from specialization.

Wassily Leontief introduced a discussing of the theory that seemed to invalidate it. He returned that the United States had a lot of capital; therefore, it should export capital-intensive products and import labor-intensive products. Instead, he found that it exported products that used more labor than the products it imported. This finding is so-called as the Leontief paradox.