Sorting it out international trade and protection with heterogeneous workers
"The two models of international trade with developed factor markets -- Heckscher-Ohlin and Specific Factors -- both suffer significant defects. For example, their predictions about the patterns of domestic production and international trade are for the most part either indeterminate or uselessly complex. The problem with these models is that the supply of factors to an industry is either perfectly elastic or perfectly inelastic.…
Contributor:
Ohnsorge, Franziska - National Bureau of Economic Research