Econ HW
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As you have learned in class, two major theories of international trade are the Ricardian model and the Heckscher- Ohlin model. The Heckscher-Ohlin model focuses on factor endowments and factor proportions while the Ricardian model focuses on differences in technology, as the fundamental basis for international trade. Therefore:
(1) Find as much information as you can about your country’s factor endowments (both quantity and quality), such as size (and education) of the labor force, size and growth of the capital stock, amount of arable land, etc. You should use the most recent data that are available.
(2) Find as much information as you can about your country’s technological characteristics, which are reflected in variables such as: electricity production & electricity generating capacity; size of the information and communications technology (ICT) sector; extent and quality of the domestic transportation network; expenditures on education; expenditures on research and development; patents; tertiary graduation rates, etc. You should use the most recent data that are available.
(3) Based on the RCA indices you calculated for Part 1 (which allowed you to determine in which product categories the country seems to have a “revealed comparative advantage”), and using the information (you found above) on the country’s resource endowments and technological characteristics, determine whether the country is exporting and importing according to what the Ricardian and Heckscher-Ohlin models would have predicted.
Required work due: To insure that you are making satisfactory progress on the Country Case Study,
(A) a brief summary of at least three elements of your country’s factor endowments, and (B) a brief summary of at least three elements of your country’s technological characteristics.
Selected Data Sources (for Finding Resource Endowments and Technological Characteristics):
1. CIA World Fact Book (https://www.cia.gov/library/publications/the-world-factbook/index.html) has data on countries’: size of labor force, including comparison with other countries, (under the “Economy” tab)
literacy rates and “school life expectancy” (under the “People” tab)
investment in fixed capital (under the “Economy” tab, under “GDP – composition, by end use”) (Note: This is total business spending on fixed assets, such as factories, machinery, equipment, dwellings, and inventories of raw materials, which provide the basis for future production.) arable land and other natural resources (under the “Geography” tab)
electricity production & electricity generating capacity (under the “Energy” tab)
education expenditures (under the “People” tab) communications (e.g., number of telephones – both main line and cellular – in use; number of internet hosts; number of internet users) transportation (e.g., number of airports with paved runways; the lengths and types of pipelines for transporting products like natural gas, crude oil, or petroleum products; total route length of the railway network; total length of the road network, including the length of the paved and unpaved portions)
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2. United Nations Educational, Scientific, and Cultural Organization (UNESCO) has data on countries’: education (e.g., school enrollments; graduates by broad field of education in tertiary education) science and technology (e.g., gross domestic expenditure on R&D, as a percent of GDP and per capita) culture and communication (e.g., number of titles of printed publications – books and pamphlets – published in the country and made available to the public) literacy (e.g., national literacy rates for youths and adults) UNESCO Data Centre Home Page: http://stats.uis.unesco.org/unesco/TableViewer/document.aspx?ReportId=143&IF_Language=eng
UNESCO “predefined tables with data on education, science and technology, culture and communication, and literacy: http://stats.uis.unesco.org/unesco/ReportFolders/ReportFolders.aspx
3. United Nations Conference on Trade and Development (UNCTAD) statistical database, called UNCTADSTAT, has data on countries’: gross capital formation (as a percentage of GDP) UNCTADSTAT Home Page: http://unctadstat.unctad.org/ReportFolders/reportFolders.aspx?sCS_referer=&sCS_ChosenLang=en Then go to “Economic Trends” “National Accounts” Table titled “GDP by type of expenditure and Value Added by kind of economic activity” or simply click on the following link: http://unctadstat.unctad.org/TableViewer/tableView.aspx?ReportId=95 Note: This is the same web site you used in Part 1 to obtain data for calculating your country’s RCA indices. Therefore, you should be familiar with how to use the various buttons on the web site to reset or change the “economy” (i.e., country), “year,” and “component” (of GDP) to find the specific data you need.
4. World Bank, “Data Catalog” has a wide range of data on countries’ population, education, health, nutrition, etc.: http://data.worldbank.org/data-catalog
5. World Bank, “Data and Statistics – Education” provides information on countries’ literacy rates and primary school enrollments: http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,contentMDK:20394704~pagePK:64133150~piPK: 64133175~theSitePK:239419~isCURL:Y~isCURL:Y,00.html
6. World Bank, World Development Report (WDR) 2013, provides lots of data on individual countries: http://econ.worldbank.org/external/default/main?contentMDK=23044836&theSitePK=8258025&piPK=82584 12&pagePK=8258258
In particular, refer to the Statistical Annex to accompany the WDR 2013: http://data.worldbank.org/data- catalog/wdr-2013-jobs
7. OECD, “STAT Extracts” provides information on countries’ gross fixed capital formation (broken down into “machinery and equipment” and “housing”) as well as information on the “technology” variables listed above: http://stats.oecd.org/Index.aspx?DatasetCode=CSP2009
8. World Bank, World Development Report 2009, “Selected Indicators” provides information on the percent of a country’s manufactured exports that are “high tech”: http://siteresources.worldbank.org/INTWDR2009/Resources/4231006-1225840759068/WDR09_22_SWDIweb.pdf
9. OECD, OECD Science, Technology, and Industry Outlook 2010 provides information on the technology characteristics of selected countries: http://www.oecd.org/document/36/0,3343,en_2649_33703_41546660_1_1_1_1,00.html#profiles
Note that this publication includes "Country Profiles" of OECD members, which may be accessed at: http://www.oecd.org/document/12/0,3746,en_2649_33703_46658636_1_1_1_1,00.html
