Teorema Hecksher Ohlin Samuelson: igualación en el precio de los factores

Summary

This video explores the 60 Links-Samuelson Theorem, which suggests that a country exports goods that intensively use its most abundant factor. For instance, capital-abundant countries export capital-intensive goods, while labor-abundant countries export labor-intensive goods. Samuelson extended this theory, suggesting that not only does comparative advantage explain specialization, but it also leads to factor price equalization. The example of the Dominican Republic and Haiti illustrates this, showing how the price of capital and labor adjusts as countries specialize in different goods, eventually leading to a convergence in factor prices across nations.

Takeaways

• 😀 The Heckscher-Ohlin model suggests that countries export goods that intensively use their abundant factor of production (capital or labor).
• 😀 Capital-abundant countries (like the U.S.) export capital-intensive goods, while labor-abundant countries (like many Latin American nations) export labor-intensive goods.
• 😀 Samuelson expanded the Heckscher-Ohlin theory by introducing the concept of factor price equalization, meaning that trade leads to equalization of capital and labor prices between trading countries.
• 😀 In the Dominican Republic, where capital is abundant, the country specializes in producing capital-intensive goods like sugarcane.
• 😀 Haiti, with its labor abundance, specializes in producing labor-intensive goods like coffee, according to the Heckscher-Ohlin model.
• 😀 The price of capital in the Dominican Republic rises as sugarcane production increases, while labor prices decrease due to reduced demand for labor in the process.
• 😀 In Haiti, the opposite happens: as coffee production increases, labor is in higher demand, raising labor prices, while capital becomes cheaper.
• 😀 The process of increased specialization in the Dominican Republic leads to higher capital prices and lower labor prices, while in Haiti, it causes the reverse effect.
• 😀 The graphs demonstrate how the price of factors of production (capital and labor) changes with trade and specialization in both countries.
• 😀 Samuelson’s extension of the Heckscher-Ohlin model predicts that factor prices (capital and labor) will equalize between countries engaged in trade, even if their initial endowments are different.

Q & A

What is the main idea behind the 60-Links Samuelson Theorem?

The 60-Links Samuelson Theorem states that a country will export the goods that use the factor it has in abundance. If a country has an abundance of capital, it will export capital-intensive goods, and if it has an abundance of labor, it will export labor-intensive goods.

What example is used in the video to explain the 60-Links Samuelson Theorem?

The video uses an example with **Haiti** and the **Dominican Republic**, two countries that differ in their factor endowments (capital and labor) and produce two goods: **sugarcane** and **coffee**.

What does the theorem suggest about the factors of production in countries with different endowments?

The theorem suggests that countries with abundant capital will specialize in producing goods that are capital-intensive (like sugarcane in the Dominican Republic), while countries with abundant labor will specialize in producing labor-intensive goods (like coffee in Haiti).

How does the abundance of capital and labor affect the factor prices in the Dominican Republic and Haiti?

In the Dominican Republic, where capital is abundant, the demand for capital increases as more sugarcane is produced, raising capital prices. Meanwhile, the demand for labor decreases as coffee production declines, lowering labor prices. In Haiti, the opposite happens: with an abundance of labor, the demand for labor increases with more coffee production, raising labor prices, while the demand for capital decreases, lowering capital prices.

What does Samuelson’s extension of the 60-Links theorem add to the original theory?

Samuelson’s extension adds that, in addition to specialization, the prices of factors of production (capital and labor) will tend to equalize across countries. As countries specialize in different goods, the prices of capital and labor will move toward equilibrium internationally.

What is the result of the equalization of factor prices predicted by Samuelson’s extension?

The equalization of factor prices results in the prices of capital and labor becoming more similar across countries. For example, if capital is cheap in the Dominican Republic and expensive in Haiti, the price in the Dominican Republic will rise, and the price in Haiti will fall until they become closer.

Why does the Dominican Republic specialize in sugarcane production according to the theorem?

The Dominican Republic specializes in sugarcane production because it is abundant in capital, and sugarcane production is capital-intensive. This aligns with the country’s comparative advantage in capital.

Why does Haiti specialize in coffee production according to the theorem?

Haiti specializes in coffee production because it is abundant in labor, and coffee production is labor-intensive. This aligns with the country’s comparative advantage in labor.

How does the demand for capital and labor change as countries specialize in different goods?

As countries specialize in producing goods that use their abundant factors, the demand for these factors increases. In the Dominican Republic, more capital is demanded for sugarcane production, while in Haiti, more labor is demanded for coffee production.

What is the role of the markets for capital and labor in the equalization process?

In the markets for capital and labor, the price of each factor adjusts based on supply and demand. As countries specialize in different goods, the increased demand for capital or labor in one country and decreased demand in another country causes the prices to shift, leading to an international equalization of factor prices.