The Simplest Possible 2x2x2 CGE Diagranomics: Revisiting the H-O, S-S Orthodoxies

The simplest possible model of computable general equilibrium with trade is presented for purposes of diagranomics pedagogica while probing/revisiting the orthodox Hecksher-Ohlin (HO) and Stolper-Samuelson (SS) theorems hopefully shedding some new light on each. Set forth against the HO orthodoxy is an H.O. heresy. The latter reverses the former outcomes, and turns the Leontief paradox no paradox accordingly. Re the SS theorem this paper challenge their policy recommendation to “bribe” the poor (or even the rich) adversely affected from free trade by pondering the meaning of bribing squarely under the light of the ‘ideal types’ model proposed herein. The paper also attempts to extend/generalize its static model by incorporating into it a growth model a la Jensen-Larsen (2004).