The Role Of Different Population Growth Rates In External Trade; An Analysis Of General Models By Hechscher- Ohlin

In this paper, it is supposed that there are only two countries in the
world, with two different population growth rates, depend on two
factors for production and own two sectors in producing goods. An
analytical generalized equilibrium model has been used to explore
possible implications of population dynamics differential for external
trade. (Research group was a combination of the young and the
elderly). The pre- supposed countries are characterized by identical
preferences for consumption and production technologies as in the
Hechscher- Ohlin framework .The results of this research indicate that
differences in population growth rates create comparative advantages
in the same way as suggested in Hechscher- Ohlin model, but
contrary to the predictions by this model, free trade would not
necessarily cause welfare gains for both of them. This research paper
mainly aims to demonstrate the role, importance and advantages of
work power in the process of production and trade.