ECON 3HH3 Lecture Notes - Lecture 3: Fair Trade Usa, Trade Adjustment Assistance, Real Wages
8 Feb 2015
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Typically, we think there are factors that are not easily replaced between sectors. In this chapter we will explain the fixed factors model: the time horizon we will have in mind is short-run . In economics we are using quantitative methods to no longer use the blah blah blah to answer this question. Instead, we are increasingly capable to quantify our answers . Do an ma in economics, and then a phd! In this chapter we will explain the fixed factors model: the time horizon we will have in mind is short-run , in future chapters we will cover the long-run version of this model (heckscher-ohlin) Opening a country to trade generates winners and losers. The specific-factors model helps explain who gains and who loses. It is called the specific-factors model because land is specific to the agriculture sector and capital is specific to the manufacturing sector; labor is used in both sectors.
