Question

48.
Leontief Paradox on factor composition of
US export and imports:​

Answer 1

Leontief's paradox in economics is that a country with a higher capital per worker has a lower capital/labor ratio in exports than in imports.

This econometric finding was the result of Wassily W. Leontief's attempt to test the Heckscher–Ohlin theory ("H–O theory") empirically. In 1953, Leontief found that the United States—the most capital-abundant country in the world—exported commodities that were more labor-intensive than capital-intensive, contrary to H–O theory. Leontief inferred from this result that the U.S. should adapt its competitive policy to match its economic realities.