Leontief paradox and empirical tests of trade.
Leontief and Input Output tables
The Leontief Paradox
Paradox lost: Explanations of the Leontief Paradox
Paradox regained: Recent Empirical Work
- Multicountry, Multifactor Tests of the Factor Abundance Theory
by Harry P. Bowen, Edward E. Leamer and Leo Sveikauskas.
American Economic Review, 77:5 (Dec.,1987), 791-809
Leontief is correct, based on modern data. The second author is the same Edward Leamer.
- International Factor Price Differences: Leontief was Right!
by Daniel Trefler
Journal of Political Economy, 101:6(Dec.,1993), 961-987.
- An Account of Global Factor Trade
by Donald R. Davis and David E. Weinstein
American Economic Review, 91:5(Dec. 2001), 1423-1453.
See also their Factor Content of Trade and their Do Factor Endowments Matter for North-North Trade? (NBER working paper 8516,Oct. 2001). Their work strongly suggests that, although the Heckscher-Ohlin theory does not explain everything, factor endowements still matter, even for trade among industrialized countries.