What is the Ricardo Viner explanation for trade policy preferences?
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Similarly, you may ask, what determines individual trade policy preferences?
If individuals evaluate both short-run and long-run effects of trade liberalization, then trade-policy preferences might depend on both factor type and industry of employment. The HO model assumes that factors can move costlessly across sectors. So trade-policy preferences are determined by sector of employment.
One may also ask, how does the specific factors model differ from the Ricardian model? Hence, the HO model is a long-run model , whereas the specific factors model is a short run model in which capital and land inputs are fixed but labor is a variable input in production. As in the Ricardian model, labor is the mobile factor between the two industries.
Besides, what is the specific factor model?
The specific factor model assumes that an economy produces two goods using two factors of production, capital and labor, in a perfectly competitive market. One of the two factors of production, typically capital, is assumed to be specific to a particular industry.
What is trade model?
A trading model is a clearly defined, step-by-step rule-based structure for governing trading activities. In this article, we introduce the basic concept of trading models, explain their benefits, and provide instructions on how to build your own trading model.