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While the Heckscher-Ohlin-Vanek (HOV) theorem has been a dominant paradigm in trade theory, the empirical evidence to support it has been weak. This paper develops a modified HOV model that allows technologies to differ across countries. The revised model significantly improves the theory’s accuracy in predicting trade flows in contrast to the traditional model. The paper also illustrates that, since countries have different technologies, measures of factor contents of trade in final goods using direct and domestically produced indirect input requirements are more accurate and yield more consistent predictions than do traditional measures.

Exports and Imports --- Macroeconomics --- Neoclassical Models of Trade --- Trade Policy --- International Trade Organizations --- Trade: General --- Innovation --- Research and Development --- Technological Change --- Intellectual Property Rights: General --- Macroeconomics: Consumption --- Saving --- Wealth --- Retail and Wholesale Trade --- e-Commerce --- Empirical Studies of Trade --- International economics --- Technology --- general issues --- Exports --- Imports --- Consumption --- Trade in goods --- International trade --- National accounts --- Trade balance --- Economics --- Balance of trade --- Italy --- E-Commerce --- General issues

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This paper investigates the sensitivity of sectoral employment and wages in the United States to changes in foreign trade prices for 1980–90. Previous studies have concentrated mainly on the impact of changes in import prices on employment and wage levels. This paper estimates the impact of changes in both import and export prices on employment and wages in each of 12 three-digit standard industrial classification (SIC) manufacturing sectors. The basic conclusion is that, for most sectors, changes in trade prices do not have significant effects on employment and wages, although they generally have a larger impact on employment than on wages.

Exports and Imports --- Labor --- Macroeconomics --- Trade: General --- Labor Demand --- Wage Level and Structure --- Wage Differentials --- Price Level --- Inflation --- Deflation --- Employment --- Unemployment --- Wages --- Intergenerational Income Distribution --- Aggregate Human Capital --- Aggregate Labor Productivity --- Wages, Compensation, and Labor Costs: General --- Labour --- income economics --- International economics --- Export prices --- Import prices --- Exports --- Prices --- International trade --- Imports --- Economic theory --- United States --- Income economics

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This paper examines the effects of intensified international competition on industry profits in six European Union (EU) countries. The paper uses two methods to estimate industry profits. The traditional method uses accounting data to obtain a measure of gross price-average cost margins. The second method directly estimates markups of price over marginal cost using new empirical techniques. Import competition is found to have disciplined market power, regardless of the method used to estimate industry profits. From the analysis of the markups, there is evidence that this is due mainly to intra-EU import competition. The evidence for export discipline is much weaker.

Exports and Imports --- Finance: General --- Macroeconomics --- Models of Trade with Imperfect Competition and Scale Economies --- Empirical Studies of Trade --- Economic Integration --- Trade: General --- Trade Policy --- International Trade Organizations --- Energy: Demand and Supply --- Prices --- General Financial Markets: General (includes Measurement and Data) --- International economics --- Finance --- Imports --- Exports --- Trade barriers --- Oil prices --- Competition --- International trade --- Financial markets --- Commercial policy --- Italy

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Using both regression- and VAR-based estimates, the paper finds that the exchange rate pass-through to import prices for a large number of countries is incomplete and larger than the pass-through to export prices. Previous studies have reported similar results, which give rise to the puzzle that while local currency pricing is needed to account for incomplete import price pass-through, it would not imply a lower export price pass-through. Recent explanations of this puzzle have emphasized markup adjustment in response to exchange rate changes. This paper suggests an alternative explanation based on the presence of both producer and local currency pricing. Using a dynamic general equilibrium model, the paper shows that a mix of producer and local currency pricing can explain the pass-through evidence even with a constant markup. The model can also explain the observed exchange rate and inflation variability as well as the fact that the regression and VAR estimates tend to be similar.

Finance --- Business & Economics --- International Finance --- Exchange rate pass-through. --- Prices. --- Commercial products --- Commodity prices --- Justum pretium --- Price theory --- Foreign exchange rate pass-through --- Pass-through of exchange rates --- Prices --- Consumption (Economics) --- Cost --- Costs, Industrial --- Money --- Cost and standard of living --- Supply and demand --- Value --- Wages --- Willingness to pay --- Foreign exchange rates --- Imports --- Exports --- Econometric models --- E-books --- International trade --- Foreign Exchange --- Macroeconomics --- Money and Monetary Policy --- Price Level --- Inflation --- Deflation --- International Policy Coordination and Transmission --- Monetary Policy --- Open Economy Macroeconomics --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Currency --- Foreign exchange --- Monetary economics --- Export prices --- Import prices --- Exchange rates --- Exchange rate pass-through --- Currencies --- United States

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A large data set on trade in manufactured products is used to evaluate the performance of a model that combines both the Ricardian and Heckscher-Ohlin effects and incorporates monopolistic competition. The paper estimates a relation implied by the model to explain relative sectoral exports of major countries to a number of important markets, using 1970-90 data for nine manufacturing sectors. The relation fits the data well and variables suggested by both traditional and new trade models play an important role in explaining relative exports.

Exports and Imports --- Finance: General --- Production and Operations Management --- Neoclassical Models of Trade --- Models of Trade with Imperfect Competition and Scale Economies --- Trade: General --- Production --- Cost --- Capital and Total Factor Productivity --- Capacity --- Macroeconomics: Production --- Trade Policy --- International Trade Organizations --- General Financial Markets: General (includes Measurement and Data) --- Macroeconomics --- International economics --- Finance --- Exports --- Total factor productivity --- Productivity --- Trade barriers --- Competition --- International trade --- Financial markets --- Industrial productivity --- Commercial policy --- United States