Bertil Ohlin (pronounced ['bærtil u'li:n]) (April 23, 1899 – August 3, 1979), was a Swedish economist and winner of the 1977 Nobel Memorial Prize in Economics. His name lives on in one of the standard mathematical model of international free trade, the Hecksher-Ohlin model. April 23 is the 113th day of the year (114th in leap years) in the Gregorian calendar. ... Year 1899 (MDCCCXCIX) was a common year starting on Sunday (link will display the full calendar) of the Gregorian calendar (or a common year starting on Friday [1] of the 12-day-slower Julian calendar). ... is the 215th day of the year (216th in leap years) in the Gregorian calendar. ... Also: 1979 by Smashing Pumpkins. ... Also: 1977 (album) by Ash. ... The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel[1] (Swedish: Sveriges Riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), commonly called the Nobel Prize in Economics, or more acurately the Nobel Memorial Prize in Economic Sciences, is a prize awarded each year for outstanding intellectual... Free trade is an economic concept referring to the selling of products between countries without tariffs or other trade barriers. ...

Having received his B.A. from Lund University 1917, and his M.A. from Harvard University in 1923, Ohlin received his doctorate from Stockholm University in 1924. In 1925 he became a professor at the University of Copenhagen. In 1929 he debated with John Maynard Keynes, contradicting the latter's view on the consequences of the heavy war reparations payments imposed on Germany. (Keynes predicted a war caused by the burden of debt, Ohlin thought that Germany could afford the reparations.) Although Keynes was probably right, the debate was important in the modern theory of unilateral international payments. Lund University main building, built in 1882 by Helgo Zettervall. ... Harvard University (incorporated as The President and Fellows of Harvard College) is a private university in Cambridge, Massachusetts, USA and a member of the Ivy League. ... Stockholm University (Stockholms universitet) is a state university in Stockholm, Sweden. ... 1924 (MCMXXIV) was a leap year starting on Tuesday (link will display the full calendar). ... Year 1925 (MCMXXV) was a common year starting on Thursday (link will display the full calendar) of the Gregorian calendar. ... The University of Copenhagen (Danish: Københavns Universitet) is the oldest and largest university and research institution in Copenhagen, Denmark. ... Year 1929 (MCMXXIX) was a common year starting on Tuesday (link will display the full calendar) of the Gregorian calendar. ... John Maynard Keynes, 1st Baron Keynes, CB (pronounced cains, IPA ) (5 June 1883 – 21 April 1946) was a British economist whose ideas, called Keynesian economics, had a major impact on modern economic and political theory as well as on many governments fiscal policies. ... World War I reparations refers to the payments and transfers of property and equipment that the German state was forced to make following its defeat during World War I. Article 231 of the Treaty (the war guilt clause) held Germany solely responsible for all loss and damage suffered by the... Unilateralism is an antonym for multilateralism. ...

In 1930 Ohlin succeeded Eli Heckscher, his teacher, as a professor of economics, at the Stockholm School of Economics. In 1933 Olin published a work that made him world renowned, Interregional and International Trade. In this Ohlin built an economic theory of international trade from earlier work by Heckscher and his own doctoral thesis. It is now known as the Heckscher-Ohlin model, one of the standard model economists use to debate trade theory. Year 1930 (MCMXXX) was a common year starting on Wednesday (link will display 1930 calendar) of the Gregorian calendar. ... Eli Filip Heckscher (Stockholm November 24, 1879 - Stockholm December 23, 1952) was a Swedish political economist and economic historian. ... This article needs additional references or sources for verification. ... The Stockholm School of Economics or Handelshögskolan is a business school and private university in Stockholm, Sweden. ... 1933 (MCMXXXIII) was a common year starting on Sunday. ... The Heckscher-Ohlin model (H-O model) is a general equilibrium mathematical model of international trade, developed by Eli Heckscher and Bertil Ohlin at the Stockholm School of Economics. ...

The model was a break-though because it showed how comparative advantage might relate to general features of a country's capital and labour, and how these features might change through time. The model provided a basis for later work on the effects of protection on real wages, and has been fruitful in producing predictions and analysis; Ohlin himself used the model to derive the Heckscher-Ohlin theorem, that nations would specialize in industries most able to utilize their mix of national resources efficiently. Today, the theory has been largely disproved, yet it is still a useful framework by which to understand international trade. In economics, the theory of comparative advantage explains why it can be beneficial for two parties (countries, regions, individuals and so on) to trade if one has a lower relative cost of producing some good. ... This article is about a city that serves as a center of government and politics. ... Look up real in Wiktionary, the free dictionary. ... The Heckscher-Ohlin theorem is one of the four critical theorems of the Heckscher-Ohlin model. ...

Later, Ohlin and other members of the "Stockholm school" extended Knut Wicksell's economic analysis to produce a theory of the macroeconomy anticipating Keynesianism. The Stockholm School, or Stockholmsskolan, is a school of economic thought. ... Knut Wicksell, Swedish economist Johan Gustaf Knut Wicksell, (December 20, 1851 Stockholm -May 3, 1926 Stocksund ) was a Swedish economist. ... Keynesian economics, or Keynesianism, is an economic theory based on the ideas of John Maynard Keynes, as put forward in his book The General Theory of Employment, Interest and Money, published in 1936 in response to the Great Depression of the 1930s. ...

Ohlin was party leader of the liberal Liberal People's Party from 1944 to 1967, the main opposition party to the Social Democrat Governments of the era, and from '44 to '45 was minister of commerce in the wartime government. His daughter Anne Wibble, representing the same party, served as Minister of Finance in 1991-1994. Liberalism is an ideology, philosophical view, and political tradition which holds that liberty is the primary political value. ... The Liberal Party of Sweden (in Swedish: Folkpartiet liberalerna, abbreviated fp, meaning Peoples Party the Liberals) is a political party in Sweden. ... 1944 (MCMXLIV) was a leap year starting on Saturday. ... 1967 (MCMLXVII) was a common year starting on Sunday of the Gregorian calendar (the link is to a full 1967 calendar). ... The Social Democratic Labour Party of Sweden (Sveriges Socialdemokratiska Arbetareparti or SAP), is a one of the main political parties in Sweden. ... Anne Wibble, born 13 October 1943 as Anne Ohlin, died 14 March 2000, was a Swedish politician (a member of the Liberal Peoples Party). ... Year 1991 (MCMXCI) was a common year starting on Tuesday (link will display the 1991 Gregorian calendar). ... Year 1994 (MCMXCIV) was a common year starting on Saturday (link will display full 1994 Gregorian calendar). ...

The Heckscher-Ohlin Theorem

Main article: Heckscher-Ohlin theorem

The Heckscher-Ohlin Theoem, which is concluded from the Heckscher-Ohlin model of international trade, states: trade between countries is in proportion to their relative amounts of capital and labor. In countries with an abundance of capital, wage rates tend to be high; therefore, labor-intensive products, e.g. textiles, simple electronics, etc., are more costly to produce internally. In contrast, capital-intensive products, e.g. automobiles, chemicals, etc., are relatively less costly to produce internally. Countries with large amounts of capital will export capital-intensive products and import labor-intensive products with the proceeds. Countries with high amounts of labor will do the reverse. The Heckscher-Ohlin theorem is one of the four critical theorems of the Heckscher-Ohlin model. ... The Heckscher-Ohlin model (H-O model) is a general equilibrium mathematical model of international trade, developed by Eli Heckscher and Bertil Ohlin at the Stockholm School of Economics. ...

The following conditions must be true:

• The major factors of production, namely labor and capital, are not available in the same proportion in both countries.
• The two goods produced either require relatively more capital or relatively more labor.
• Labor and capital do not move between the two countries.
• There are no costs associated with transporting the goods between countries.
• The citizens of the two trading countries have the same needs.

The theory does not depend on total amounts of capital or labor, but on the amounts per worker. This allows small countries to trade with large countries by specializing in production of products that use the factors which are more available than its trading partner. The key assumption is that capital and labor are not available in the same proportions in the two countries. That leads to specialization, which in turn benefits the country’s economic welfare. The greater the difference between the two countries, the greater the gain from specialization.

Wassily Leontief made a study of the theory that seemed to invalidate it. He noted that the United States had a lot of capital; therefore, it should export capital-intensive products and import labor-intensive products. Instead, he found that it exported products that used more labor than the products it imported. This finding is known as the Leontief paradox. Wassily Leontief (August 5, 1905, Munich, Germany – February 5, 1999, New York)[1], was an economist notable for his research on how changes in one economic sector may have an effect on other sectors. ... Leontiefs paradox in economics was the result of Professor Wassily W. Leontiefs attempt to test the Heckscher-Ohlin theory. ...

See also

• Liberalism
• Contributions to liberal theory
• Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel

Liberalism is an ideology, philosophical view, and political tradition which holds that liberty is the primary political value. ... Contributions to liberal theory is a partial list of individual contributions on a worldwide scale. ... The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel (in Swedish Sveriges Riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is a prize awarded each year for outstanding intellectual contributions in the field of economics. ...

Significant Publications

• The German Reparations Problem, 1930
• Interregional and International Trade, 1933
• Mechanisms and Objectives of Exchange Controls, 1937

Year 1930 (MCMXXX) was a common year starting on Wednesday (link will display 1930 calendar) of the Gregorian calendar. ... 1933 (MCMXXXIII) was a common year starting on Sunday. ... 1937 (MCMXXXVII) was a common year starting on Friday (link will take you to calendar). ...

External links

• Bertil Ohlin
• Bertil Ohlin Institute
• Ohlin's life in economics
• Bertil Ohlin – Autobiography
• Nobel lecture
• Presentation: THE YOUNG OHLIN ON THE THEORY OF INTERREGIONAL AND INTERNATIONAL TRADE

Bibliography

• Encyclopedia Britannica Online "International trade"
• NobelPrize.org "Why Trade?"
• Chapter 60 The Heckscher-Ohlin (Factor Proportions) Model