ABSTRACT
In recent years trade theorists have been interested in modelling the consequences of factor specificity (lack of mobility) for various propositions in trade theory. Jones (1971) constructed a model of trade in which each of the two sectors has a specific factor and there is only one mobile factor. He analyzed the comparative static properties of that model — specifically commodity-price-factorprice relationships. The dual of this, the output-endowment relationships, are also easy to analyze. In other important and interesting developments, Hazari and Pattanaik (1980) and Hazari (1982) introduced the notion of sector specificity of foreign ownership of capital in the pure theory of international trade.' In this chapter we shall present the Jones model and in subsequent chapters the models of Hazari-Pattanaik and Hazari.
