Labor Mobility, Remittances, and International Trade: Theoretical Aspects / Мобильность рабочей силы, денежные переводы и международная торговля: теоретические аспекты

Abstract

Different theories hypothesize that some specific differences between countries constitute the basis for international trade. Those assumptions predominantly revolve around factors of production. For instance, Ricardo argues that, due to the differences in factor productivities, countries tend to specialize, depending on their comparative advantages, which create incentives to trade. In the Heckscher-Ohlin model (HO), differences in relative factor endowments are believed to facilitate trade. While there is no rigorous evidence in the theory on the link between trade and migration, the main debate is whether trade and factor movements are substitutes or complements