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The dynamic Heckscher–Ohlin model: A diagrammatic analysis

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  • Eric W. Bond
  • Kazumichi Iwasa
  • Kazuo Nishimura

Abstract

In this paper, we show that the main results of dynamic Heckscher-Ohlin models (with non-homothetic preferences) can be derived from diagrams which represent the basic functions in static models such as the Rybczynski line, income expansion paths, and excess demand functions at steady states. Results include not only the existence and the multiplicity of steady states in autarky and under free trade, but also their stabilities and the static and dynamic Heckscher-Ohlin theorems.
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  • Eric W. Bond & Kazumichi Iwasa & Kazuo Nishimura, 2012. "The dynamic Heckscher–Ohlin model: A diagrammatic analysis," International Journal of Economic Theory, The International Society for Economic Theory, vol. 8(2), pages 197-211, June.
    • Handle: RePEc:bla:ijethy:v:8:y:2012:i:2:p:197-211
    DOI: j.1742-7363.2012.00186.x
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    1. Eric W. Bond & Kazumichi Iwasa & Kazuo Nishimura, 2011. "A Dynamic Heckscher-Ohlin Model and Inferior Goods," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 18(3), pages 217-236.
    2. Bond, Eric W. & Iwasa, Kazumichi & Nishimura, Kazuo, 2013. "Poverty Traps And Inferior Goods In A Dynamic Heckscher–Ohlin Model," Macroeconomic Dynamics, Cambridge University Press, vol. 17(6), pages 1227-1251, September.
    3. Zhiqi Chen, 1992. "Long-Run Equilibria in a Dynamic Heckscher-Ohlin Model," Canadian Journal of Economics, Canadian Economics Association, vol. 25(4), pages 923-943, November.
    4. Eric Bond & Kazumichi Iwasa & Kazuo Nishimura, 2011. "A dynamic two country Heckscher–Ohlin model with non-homothetic preferences," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 48(1), pages 171-204, September.
    5. Been‐Lon Chen & Kazuo Nishimura & Koji Shimomura, 2008. "Time preference and two‐country trade," International Journal of Economic Theory, The International Society for Economic Theory, vol. 4(1), pages 29-52, March.
    6. Brock, William A, 1973. "Some Results on the Uniqueness of Steady States in Multisector Models of Optimum Growth when Future Utilities are Discounted," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 535-559, October.
    7. Kazuo Nishimura & Koji Shimomura, 2012. "Trade and Indeterminacy in a Dynamic General Equilibrium Model," Springer Books, in: John Stachurski & Alain Venditti & Makoto Yano (ed.), Nonlinear Dynamics in Equilibrium Models, edition 127, chapter 0, pages 347-361, Springer.
    8. Jaume Ventura, 1997. "Growth and Interdependence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(1), pages 57-84.
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    10. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    11. Benhabib, Jess & Nishimura, Kazuo, 1979. "On the Uniqueness of Steady States in an Economy with Heterogeneous Capital Goods," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(1), pages 59-82, February.
    12. Kazuo Nishimura & Alain Venditti & Makoto Yano, 2010. "Expectation‐driven fluctuations and welfare loss under free trade in two‐country models," International Journal of Economic Theory, The International Society for Economic Theory, vol. 6(1), pages 97-125, March.
    13. Weller, Paul & Yano, Makoto, 1987. "Forward Exchange, Futures Trading, and Spot Price Variability: A General Equilibrium Approach," Econometrica, Econometric Society, vol. 55(6), pages 1433-1450, November.
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    Cited by:

    1. Iwasa, Kazumichi & Sorger, Gerhard, 2018. "Periodic solutions of the one-sector growth model: The role of income effects," Journal of Mathematical Economics, Elsevier, vol. 78(C), pages 59-63.
    2. Takashi Kamihigashi, 2015. "Multiple interior steady states in the Ramsey model with elastic labor supply," International Journal of Economic Theory, The International Society for Economic Theory, vol. 11(1), pages 25-37, March.
    3. Naoki Yoshihara & Soh Kaneko, 2016. "On the Existence and Characterization of Unequal Exchange in the Free Trade Equilibrium," Metroeconomica, Wiley Blackwell, vol. 67(2), pages 210-241, May.
    4. Kenji Sato & Makoto Yano, 2013. "Optimal ergodic chaos under slow capital depreciation," International Journal of Economic Theory, The International Society for Economic Theory, vol. 9(1), pages 57-67, March.
    5. Olatunji Abdul Shobande, 2019. "Effect of Economic Integration on Agricultural Export Performance in Selected West African Countries," Economies, MDPI, vol. 7(3), pages 1-14, August.
    6. Kazuo Nishimura & Carine Nourry & Thomas Seegmuller & Alain Venditti, 2013. "Destabilizing balanced-budget consumption taxes in multi-sector economies," International Journal of Economic Theory, The International Society for Economic Theory, vol. 9(1), pages 113-130, March.
    7. Takashi Kamihigashi, 2013. "Ergodic chaos and aggregate stability: A deterministic discrete-choice model of wealth distribution dynamics," International Journal of Economic Theory, The International Society for Economic Theory, vol. 9(1), pages 45-56, March.
    8. Kurose, Kazuhiro & Yoshihara, Naoki, 2016. "The Heckscher-Ohlin-Samuelson Model and the Cambridge Capital Controversies," UMASS Amherst Economics Working Papers 2016-05, University of Massachusetts Amherst, Department of Economics.
    9. Kazumichi Iwasa & Kazuo Nishimura, 2023. "A Two Country Model of Trade with International Borrowing and Lending," Discussion Paper Series DP2023-08, Research Institute for Economics & Business Administration, Kobe University.
    10. Kazuhiro Kurose & Naoki Yoshihara, 2018. "The Heckscher—Ohlin—Samuelson Trade Theory and the Cambridge Capital Controversies: On the Validity of Factor Price Equalisation Theorem," Working Papers SDES-2018-17, Kochi University of Technology, School of Economics and Management, revised Nov 2018.
    11. Kurose, Kazuhiro & Yoshihara, Naoki, 2018. "The Heckscher—Ohlin—Samuelson Trade Theory and the Cambridge Capital Controversies: On the Validity of Factor Price Equalisation Theorem," Discussion Paper Series 686, Institute of Economic Research, Hitotsubashi University.

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