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.