Ricardo-Viner Model

The Ricardo-Viner model is an economic theory that explains how different industries benefit from trade, emphasizing that some factors of production (like specific types of labor or capital) are not easily transferable between industries. Unlike other models that assume resources can move freely, this one recognizes that certain workers and tools are tied to specific sectors. As a result, a sector may prosper in international trade, while another may struggle, impacting income distribution and employment within those sectors. This model highlights the complexity of trade effects on various stakeholders within an economy.