THEOREMS OF INTERNATIONAL-TRADE IN TIME-PHASED ECONOMIES

Numerous recent studies conclude that the basic results of the Heckscher-Ohlin theory are vitiated by 'capital': a collection of heterogeneous produced means of production. where production takes time and the interest rate is positive. This paper examines the sensitivity of the four basic theorems to the presence of capital and concludes that all four are impervious. The pessimistic conclusions permeating the literature are consequently due not to the nature of capital but rather to other departures from the two-by-two neoclassical model, departures that can be handled fully in a timeless context and, for the most part, have been. © 1979.