Trade volume and country size in a Heckscher-Ohlin model

Soo, K T (2008) Trade volume and country size in a Heckscher-Ohlin model. Economics Bulletin, 6 (1). pp. 1-7. ISSN 1545-2921

Abstract

This paper develops a model of international trade based on differences in factor endowments across countries. We use this model to show that in such an environment, holding relative endowments and the size of the world economy constant, the volume of trade increases as countries become more similar to each other in terms of their relative sizes.