Putting Theory to the Test: Empirical Studies
Any final chapter of a theory section must assess the value of theory but, at the risk of becoming a rag-bag or a last-minute assortment of odds and ends, it must include such topics as have not fitted happily into the general arrangement of the material which has preceded it. Three largely unrelated matters are included in this chapter. We have dealt with two broad lines of development in trade theory: the classical theory, based on comparative costs, and the development of factor endowment analysis, summed up and suggested by the Heckscher-Ohlin theorem. Some further but brief discussion of the relation of these two strands is appropriate. This is our first task.
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