The Role Of Different Population Growth Rates In External Trade; An Analysis Of General Models By Hechscher- Ohlin

Abstract

In this paper, it is supposed that there are only two countries in theworld, with two different population growth rates, depend on twofactors for production and own two sectors in producing goods. Ananalytical generalized equilibrium model has been used to explorepossible implications of population dynamics differential for externaltrade. (Research group was a combination of the young and theelderly). The pre- supposed countries are characterized by identicalpreferences for consumption and production technologies as in theHechscher- Ohlin framework .The results of this research indicate thatdifferences in population growth rates create comparative advantagesin the same way as suggested in Hechscher- Ohlin model, butcontrary to the predictions by this model, free trade would notnecessarily cause welfare gains for both of them. This research papermainly aims to demonstrate the role, importance and advantages ofwork power in the process of production and trade.

Keywords

• different population growth rate - hechscher- ohlin model – steady state equilibrium