How capital investment in a developing country affects trade

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Reference no: EM131917607

Problem

1. Explain how real capital investment in a developing country affects trade, using the Heckscher-Ohlin model and the Rybczynski theorem.

2. What happens to output and the relative sizes of capital stock if controls over foreign ownership keep the marginal productivity of capital from equalizing between two countries?

3. Would the migration of highly skilled labor from a developing country to the United States have the same trade impact as the migration of less-skilled production workers? Why or why not?

Reference no: EM131917607

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