Specific Factors Model: Short-Run Trade Winners
Specific factors model analysis explains why trade creates clear short-run winners and losers when capital or land is tied to...
trade theory
Lerner Diagram: Factor Prices in Trade Theory
Lerner diagram analysis shows how goods prices determine wages and capital returns through unit-value isoquants in trade theory.
Reciprocal Demand: Mill’s Trade Price Logic
Reciprocal demand explains how Mill’s trade theory determines the exact terms of trade inside the range created by comparative advantage.
Offer Curves: Reciprocal Demand and Terms of Trade
Offer curves explain how reciprocal demand determines the terms of trade and the volume of trade between two countries.
Melitz Heterogeneous Firms Model: How Trade Reshapes Industries from the Inside
The Melitz heterogeneous firms model explains why only the most productive firms export and why trade reshapes industries by reallocating...
Ricardian Model of Trade: The Simplest Comparative Advantage Theory
The Ricardian model of trade explains why countries gain from specialisation based on relative productivity, not absolute productivity, making it...
Stolper-Samuelson Theorem: Free Trade’s Winners and Losers
The Stolper-Samuelson theorem explains how trade liberalisation raises real returns to the abundant factor and lowers real returns to the...