Explain why the Leontief paradox and the more recent Bowen, Leamer, and Sveikauskas results reported in the text contradict the factor-proportions theory.goods. However, Leontief found that the U.S. actually exportedThe factor-proportions theory predicts that the U.S. should exportgoods.Bowen, Leamer, and Sveikauskas tested the Heckscher-Ohlin theory by comparing the ratio of a country's endowment of a factor to each country's share of worldincome. Assuming the factor proportions theory is correct, a country whose factor share exceeded their income share would be anof that factor. Fortwo-thirds of the factors tested, trade ran in the predicted direction less thanpercent of the time.

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Explain why the Leontief paradox and the more recent Bowen, Leamer, and Sveikauskas results reported in the text contradict the factor-proportions theory.

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Question

Explain why the Leontief paradox and the more recent Bowen, Leamer, and Sveikauskas results reported in the text contradict the factor-proportions theory.
goods. However, Leontief found that the U.S. actually exported
The factor-proportions theory predicts that the U.S. should export
goods.
Bowen, Leamer, and Sveikauskas tested the Heckscher-Ohlin theory by comparing the ratio of a country's endowment of a factor to each country's share of world
income. Assuming the factor proportions theory is correct, a country whose factor share exceeded their income share would be an
of that factor. For
two-thirds of the factors tested, trade ran in the predicted direction less than
percent of the time.

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