The Heckscher-Ohlin Model Is Famous for Being Elegant and Mathematically

question 11

Essay

The Heckscher-Ohlin model is famous for being elegant and mathematically sophisticated, yet failing to describe reality. One manifestation of this fact is Trefler's Case of Missing Trade. Explain what exactly is missing. In what sense is it missing?
How would you explain why it is missing?
How can a relaxation of the identical production functions explain the case of the missing trade?
How did the results obtained by Davis and Weinstein strengthen support for the validity of the HO model?

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Definitions:

Unpleasant Stimulus

An external factor that causes discomfort or displeasure, often used in psychological experiments to provoke a response.

Withdrawal

The discomfort and distress that follow discontinuing an addictive drug or behavior.

Reinforcement

In behavioral psychology, a consequence applied to an organism's environment that increases the likelihood of that organism repeating the associated behavior in the future.

Shaping Behavior

A method of positive reinforcement of behaviors that are successively closer to the desired behavior, used in behavior modification programs.