U.S.exports are less capital-intensive than U.S.imports,despite the relative abundance of capital in the country.What is this phenomenon that runs contrary to the prediction of the Heckscher-Ohlin theory called?

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Quizplus · Accepted Answer

This phenomenon is known as the Leontief Paradox, as it contradicts the prediction of the Heckscher-Ohlin theory that countries will export goods that are capital-intensive and import goods that are labor-intensive. The paradox was first observed by economist Wassily Leontief in the 1950s, who found that the U.S. was exporting relatively more labor-intensive goods and importing relatively more capital-intensive goods than what the theory predicted.

USExports Are Less Capital-Intensive Than U