TY  - JOUR
AU  - Ohnsorge,Franziska
AU  - Trefler,Daniel
TI  - Sorting It Out: International Trade and Protection With Heterogeneous Workers
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10959
PY  - 2004
Y2  - December 2004
UR  - http://www.nber.org/papers/w10959
L1  - http://www.nber.org/papers/w10959.pdf
N1  - Author contact info:
Daniel Trefler
Rotman School of Management
University of Toronto
105 St. George Street
Toronto, ON M5S 3E6
CANADA
Tel: 416/946-7945
Fax: 416/978-5433
E-Mail: dtrefler@rotman.utoronto.ca
AB  - 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. Using a model in which heterogeneous workers sort across industries we eliminate this problem. The result is a multi-good model with sharp predictions about (1) the domestic pattern of production, (2) North-North and North-South trade, (3) the demand for protection, (4) the determinants of domestic income distribution, and (5) the effect of trade on economic development.
ER  -