Under The Heckscher-Ohlin Theorem we would expect the U.S. to export products such as
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An FTA creates a large free trade area with common factor prices. It increases the economic power of the area and promotes its culture. (e.g., US, China.) FPE also increases factor mobility. One denarius was a good wage for one day's labor anywhere in the Empire. Show Especially, low wage countries tend to adopt the culture of the high wage economy. (i) In 331 BC, Alexander seized the treasury of Persepolis, and minted drachma coins from the silver looted there (120,000 talents of gold and silver from Persepolis, 50,000 talents from Susa, 26,000 talents from Ectabana. In total Alexander's loot was over 200,000 talents. Today the haul would be worth about $20 billion. (1 talent = 960 troy oz ≅ $4.8 billion at $25/troy oz, and if 10% were gold, then 20,000 talents of gold ≅ $23 billion.) These coins were a great stimulus to the European economy.
The Roman style of government was copied in Western Europe and the Greek became the lingua franca, similar to Butonghua in China.  British Museum. Julius Caesar's tomb in Palatino Hill, Rome. Caesar's gift to every Roman citizen = 75 drachma (about $12,000) An Italian inscription which explains that the body of an ancient ruler, Caesar, was deposited here. Julius Caesar laid the cornerstone of the Roman Empire (27 BC - 476 AD). By conquering the neighboring countries, Roman legions also performed police function and ensured safety of travelers throughout the Empire. For example, the Praetorian Guard and Roman legions stationed in various outposts provided peace and maintained law and order throughout the Empire. As a result, international trade flourished on an unprecedented scale. Licinius Crassus crushed the Spartacus rebellion (71 BC). Silver denarius was worth about $50 - 100 (to buy bread as of 2015) during the times of Jesus. pay = 225 denarii (about $5-10,000) in the first century. (ii) In the West, Caesar and Augustus laid the foundation for a large free trade area (27 BC - 476 AD). Augustus built roads to military posts. The Roman roads comprised more than 250,000 miles, of which 50,000 miles were stone-paved. Horses were used to carry mail. (50 miles a day) Western Europe borrowed the Roman system of government with senate consent . (iii) Standardization: one government, one language (Greek), and Roman standardization . All roads lead to Rome! Romans built roads to Lutetia (Paris today) and aquiducts during the first century AD, and founded Londinium (London today) around 43 AD. The Roman empire also became a common market (mobile factors). People in the Mediterranean world spoke one language (Greek), had one government (Roman) and traded freely throuout the Empire. It provided the foundation of the Western civilization. (Caesar →Kaiser in Germany → tsar in Russian). (iv) In China, Qin Shihuang united the 7 warring states (which ended the warring states period, 476 -221 BC), and created a large free trade area in 221 BC, standardized Chinese characters.
(v) Income Effects on Morality: A permanent increase in income increases the moral standards. (Income growth raises moral sensitivity. Gradually, gender discrimination, slavery, etc. disappears) Black death and the subsequent rise in wage: Florentine women were permitted to inherit wealth. Since the US created a large free trade area by eliminating interstate trade tax, it became the hegemon or dominant power in the 20th century. European countries are imitating the US by creating the EU. Now most invoices are written in English even between countries not involving trade with the US. Augustus Museum of Fine Arts, Boston During the period of the Empire, portorium (tariff) was quadragesima (1/40 = 2.5%) of the value of imported goods. Gradually, the silver content of denarius was reduced to cover the budget deficit. The Roman army grew from 250,000 troops to over 600,000. w = 225 denarii (legionaire, about $10,000 today), The countries that received Roman influences generally have a higher living standard than the rest. Since the 1960s, the massive tide of globalization is changing the lives and economies of large trading blocs. In Roman Britain, a French girl Fortunata cost 600 denarii (AD 80), silver fir tablet, Museum of London (The Telegraph). Papyrus was not easily available, and the Romans wrote on wood tablets, using a metal stylus to scratch words in black wax. What does the HeckscherThe Heckscher-Ohlin theorem predicts the pattern of trade between countries based on the characteristics of the countries. It says that a capital abundant country will export the capital intensive good while the labor abundant country will export the labor intensive good (Suranovic, 2010).
What does HeckscherThe Heckscher-Ohlin model maintains that the specific natural resources that a country has would give it an advantage in producing related goods, this is coupled with land, capital, and human resources. This model shows that a country will export goods or resources it has in abundance.
What does the HeckscherThe Heckscher-Ohlin theorem states that if two countries produce two goods and use two factors of production (say, labour and capital) to produce these goods, each will export the good that makes the most use of the factor that is most abundant.
What are the two factors of production in the HeckscherTwo factors of production, labor and capital, are used to produce clothing and steel. Both labor and capital are homogeneous. Thus there is only one type of labor and one type of capital. The laborers and capital equipment in different industries are exactly the same.
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