Consider the Heckscher-Ohlin model with two countries, two goods and two factors of production, skilled and unskilled labour. In this model, the two countries can equalize the skill premium (the wage...

The Heckscher-Ohlin model is developed by Eli Heckscher and Bertil Ohlin at the
Stockholm School of Economics. It is a theory in economics which explains what can be
most plentifully and efficiently produced. It is a general equilibrium mathematical model
of international trade which is used to evaluate trade and, more specifically, the
equilibrium of trade between two countries that have varying specialties. Further, the
model says that countries will import products that use the countries’ scarce factor(s)
and export product that use their...