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Leontief Paradox |
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Leontief ParadoxThe finding of Leontief (1954) that U.S. imports embodied a higher ratio of capital to labor than U.S. exports. This was surprising because it was thought that the U.S. was capital abundant, and the Heckscher-Ohlin Theorem would then predict that U.S. exports would be relatively capital intensive.Similar MatchesLeontief compositeLeontief compositeA composite of two or more goods or factors that includes them in fixed proportions, analogous to the Leontief technology. Leontief technologyLeontief technologyA production function in which no substitution between inputs is possible: F(V) = mini(Vi/ai), where V is a vector of inputs Vi, and ai are the constant per unit input requirements. Isoquants are L-shaped. |
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