The North-South Trade Featuring the Leontief Trade Improves Poverty and Inequality

This study derives the general trade equilibrium with factor price non-equalizations and demonstrates the Loentief trade (the trade pattern of the Leontief paradox) is a regular trade pattern theoretically. It also shows the doctrine and the sign predictions of the effective endowments (seeTrefler, 1993) and the virtual endowments (see Fisher and Marshal 2008), which introduced different productivities (technologies) within the Heckscher-Ohlin platform, have adopted the Loentief trade. The intersection of goods price diversifications cone (Fisher, 2011) can additionally demonstrate it. There are a hundred more pieces of literature reporting the evidence of the Leontief paradox. All of them are about the trades between North countries and South countries. The study illustrates that the essential features of the North-south trade are the Leontief trade. A unique phenomenon observed in the North-South trades is wages increasing both in the south and in the north. The Leontief trade can explain it well