dolution

Table 5.2 gives the capital stock per worker of a number of developed and developing countries in 2006. Capital stocks are measured in 1990 international dollar prices to reflect the actual purchasing power of the dollar in each country, thus allowing meaningful international comparisons. The table shows that the United States has a lower capital stock per worker than many other industrial or developed countries (the left-hand part of the table) but a much higher capital stock per worker than developing countries (the right-hand part of the table). From Table 5.2, we can thus infer that the United States has a comparative advantage in capital-intensive products with respect to developing countries but not with respect to many other developed or industrial countries. This is broadly consistent with the data presented in Table 5.1. Having clarified the meaning of factor intensity and factor abundance, we are now ready to present the Heckscher–Ohlin theory.