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Please state and explain the Leontief Paradox

Please state and explain the Leontief Paradox

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Factor proportion theory (HO Model) of International trade is one of the most influential idea in international economics. Therefore, it has been a subject matter of extensive imperical testing. The most important emperical testing was done by Leontief on US data. As we know US continuous to be high on the ranking of capital-labor ratio. Therefore, we can expect US to be exporter of capital intensive good and importer of labor intensive good but this was not the case during 25 years after Second World War. Leontief study found that US exports were less capital intensive than US imports. This result is known as Leontief paradox.

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