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Summary Article: Ohlin, Bertil from The Hutchinson Unabridged Encyclopedia with Atlas and Weather Guide

Swedish economist and political leader. He shared the 1977 Nobel Prize for Economics with the English economist James Meade for contributions to the theory of international trade.

Ohlin first made a name for himself in 1929 by disputing Keynes's treatment of the German transfer problem, that is, the problem of how Germany was to pay World War I reparations. But his reputation was only firmly secured by the publication of Interregional and International Trade (1933). Starting from an article written by his old teacher, Eli Heckscher, Ohlin developed the thesis that both interregional and international trade are devices for the spatial exchange of the goods and services produced by factors of production, since these factors themselves are to a greater or lesser extent incapable of being moved in space – land is the classic case of an immovable factor – in consequence of which, relative prices in different geographical locations depend on the relative scarcity of factor endowments in these locations.

To put this in the language of modern trade theory: countries (or regions) will export commodities that are produced with their relatively abundant factors of production, and will import those that are produced with their relatively scarce factors, so that international trade tends towards an equalization of factor prices between trading nations, which is not to say that they will be equalized in practice. This Heckscher-Ohlin Theorem, as it was soon to be called, entered almost immediately into the textbook literature. It is doubtful, however, whether any later textbook treatment improved on Ohlin's own masterful presentation.

Ohlin was born in Klippan, Sweden, the son of a lawyer and police superintendent. He entered the University of Lund at the age of 16, transferring to the Stockholm School of Economics and Business Administration two years later. Graduating in 1919, he began working for his doctorate under Swedish economist Gustav Cassel. He spent a few months at the University of Cambridge and a year at Harvard University before receiving his doctorate in 1924. From 1925 to 1930, he was a professor at the University of Copenhagen. In 1930 he returned to the Stockholm School of Economics to succeed Eli Heckscher, and remained there until his retirement in 1965. He was a member of the Swedish parliament for 32 years from 1938 to 1970, and a leader of the Swedish Liberal Party during its 23 years of opposition from 1944 to 1967, serving as a minister of trade in the final years of World War II. He was a prolific journalist who wrote over a thousand newspaper articles between 1919 and 1977.

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