The Heckscher–Ohlin model (/hɛkʃr ʊˈliːn/, 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. It builds on David Ricardo's theory of comparative advantage by predicting patterns of commerce and production based on the resources of a trading region. The model essentially says that countries export the products which use their relatively abundant and cheap factors of production, and import the products which use the countries' relatively scarce factors.
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Heckscher–Ohlin model in the context of Stockholm School of Economics
The Stockholm School of Economics (SSE; Swedish: Handelshögskolan i Stockholm, HHS) is a private business school located in city district Vasastaden in the central part of Stockholm, Sweden. SSE offers BSc, MSc and MBA programs, along with PhD- and Executive education programs.
SSE is accredited by EQUIS and is a member of CEMS. SSE has founded sister organizations: SSE Riga in Riga, Latvia, and SSE Russia in St Petersburg and Moscow, Russia. It also operates the European Institute of Japanese Studies (Japanese, kanji: 欧州日本研究所, Japanese, romaji: Ōshū Nihon kenkyūjo), a research institute in Tokyo, Japan.
Heckscher–Ohlin model in the context of Bertil Ohlin
Bertil Gotthard Ohlin (Swedish: [ˈbæ̌ʈːɪl ʊˈliːn]) (23 April 1899 – 3 August 1979) was a Swedish economist and politician. He was a professor of economics at the Stockholm School of Economics from 1929 to 1965. He was also leader of the People's Party, a social-liberal party which at the time was the largest party in opposition to the governing Social Democratic Party, from 1944 to 1967. He served briefly as Minister of Commerce and Industry from 1944 to 1945 in the Swedish coalition government during World War II. He was President of the Nordic Council in 1959 and 1964.
Ohlin's name lives on in one of the standard mathematical models of international free trade, the Heckscher–Ohlin model, which he developed together with Eli Heckscher. He was jointly awarded the Nobel Memorial Prize in Economic Sciences in 1977 together with the British economist James Meade "for their pathbreaking contribution to the theory of international trade and international capital movements".