Integrated Equilibrium in a Four-good Heckscher-Ohlin-Ricardo model

This paper develops a four-good version of the Davis (1995) Heckscher-Ohlin-Ricardo model of international trade based on technological and factor endowment di¤erences across countries. We develop several results from this model. First, the area de\u85ning the integrated equilibrium is smaller, the greater is the weight placed by consumers on the goods that have di¤erent technologies across countries, relative to the goods that have identical tech-nologies across countries. Second, demand conditions can turn the Heckscher-Ohlin model and the Ricardian model, into special cases of the Heckscher-Ohlin-Ricardo model. Third, trade patterns in the four-good model may be di¤erent from those of Daviss (1995) three-good model; in particular, in-creasing similarity in relative endowments across countries may under certain circumstances increase the volume of trade. JEL Classi\u85cation: F11