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Consider 2 countries, Ireland and Greece, with the same preference, and using the same
technology to produce 2 goods with 2 factors, labor and capital. Suppose Ireland is relatively
capital abundant and its government proposes measures to promote capital inflows, then:
if these measures promote capital outflows from non trading partners, greek workers will gain and
greek capitalists will lose
If these measures promote capital inflows from Greece, greek capitalists will gain and greek
workers will lose
If these measures promote capital inflows from Greece, Irish capitalists will support it and Irish
workers will oppose it
If these measures promote capital inflows from non trading partners, Irish capitalists will support it
and Irish workers will oppose it

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Consider 2 countries Ireland and Greece with the same pref.pdf

  • 1. Consider 2 countries, Ireland and Greece, with the same preference, and using the same technology to produce 2 goods with 2 factors, labor and capital. Suppose Ireland is relatively capital abundant and its government proposes measures to promote capital inflows, then: if these measures promote capital outflows from non trading partners, greek workers will gain and greek capitalists will lose If these measures promote capital inflows from Greece, greek capitalists will gain and greek workers will lose If these measures promote capital inflows from Greece, Irish capitalists will support it and Irish workers will oppose it If these measures promote capital inflows from non trading partners, Irish capitalists will support it and Irish workers will oppose it