The Leontief Paradox refers to an unexpected finding in international trade theory, discovered by economist Wassily Leontief in the 1950s. According to the Heckscher-Ohlin theorem, countries will export goods that utilize their abundant factors of production and import goods that utilize their scarce factors. However, Leontief's empirical analysis of the United States' trade patterns revealed that the U.S., a capital-abundant country, was exporting labor-intensive goods while importing capital-intensive goods. This result contradicted the predictions of the Heckscher-Ohlin model, leading to the conclusion that the relationship between factor endowments and trade patterns is more complex than initially thought. The paradox has sparked extensive debate and further research into the factors influencing international trade, including technology, productivity, and differences in factor quality.
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