Document Type

Report

Publication Date

1995

Number

274

Abstract

The incorporation of natural resources into trade models offers a significant advancement in the understanding of trade patterns. Before the inception of natural resource-trade models explanations of trade patterns relied heavily on the fourfold theorems of Rybczynski, Stopler-Samuelson, Heckscher-Ohlin and factor price equalization. These theorems continue to play significant roles in international trade; however, their static semblance limits their applicability to real world issues in trade. By observation trade patterns do change and though the four static theorems could be used to explain why changes in trade patterns occur, this is not to a satisfactory degree. Natural resources introduce a dynamic perspective that helps to bridge this gap. Furthermore, natural resources are in their own right a significant component of trade.

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