Empirical Tests of Alternative Models of International Growth

Laurence J. Kotlikoff, Edward E. Leamer

NBER Working Paper No. 1414 (Also Reprint No. r0875)
Issued in August 1984
NBER Program(s):   ITI   IFM

Recent changes in patterns of international trade and growth have rekindled interest in the relationships among trade, growth, and the international distribution of income. Three alternative models can serve as a theoretical foundation for an empirical analysis of these relationships. The first is the standard Heckscher-Ohlin-Samuelson (Ho) trade model with equalnumbers of factors and goods and incomplete specialization. The second model allows complete specialization and more goods than factors. The third model posits short run capital immobility. Each of these models has quite different implications for the determination of wage levels and growth rates.The conclusions that we draw from this research are rather mixed. Each of the models perform well on certain criteria and poorly on others. While the standard HO model clearly fails to satisfy certain cross-equation constraints, national endowments are remarkably good predictors of the locus of international production. There are, however, significant nonlinearities in the relationship between factor allocations and national endowments. Such nonlinearities are predicted by the uneven version of the HO model. At odds with both of these models is our finding that lagged values of inputs providean important explanation of current factor demands. Such correlations are suggested by the adjustment cost model.

download in pdf format
   (533 K)

download in djvu format
   (389 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w1414


Users who downloaded this paper also downloaded these:
Deardorff Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?
Davis, Weinstein, Bradford, and Shimpo w5625 The Heckscher-Ohlin-Vanek Model of Trade: Why Does It Fail? When Does It Work?
Leamer and Levinsohn w4940 International Trade Theory: The Evidence
O'Rourke and Williamson w7411 The Heckscher-Ohlin Model Between 1400 and 2000: When It Explained Factor Price Convergence, When It Did Not, and Why
Bowen, Leamer, and Sveikauskas w1918 Multicountry, Multifactor Tests of the Factor Abundance Theory
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us