Pattern of Trade between Underemployed Economies.

In this paper, the authors analyze the factors determining the pattern of trade between underemployed economies. They find, among other things, that a low-wage, land-abundant country exports the land-using, labor-intensive product to a high-wage, capital-abundant country. The authors also find conditions under which a high-wage, capital-rich country may export the labor-intensive product (the Leonteif paradox). Copyright 1990 by The London School of Economics and Political Science.