Bertil Ohlin

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Bertil Ohlin
Bertil Ohlin
Minister for Trade
In office
Prime Minister Per Albin Hansson
Preceded by Herman Eriksson
Succeeded by Gunnar Myrdal
Leader of the People's Party
In office
Preceded by Gustaf Andersson
Succeeded by Sven Wedén
Member of the Swedish Parliament
for Stockholm Municipality
In office
President of the Nordic Council
In office
Preceded by Nils Hønsvald
Succeeded by Gísli Jónsson
In office
Preceded by Nils Hønsvald
Succeeded by Sigurður Bjarnason
Personal details
Born(1899-04-23)23 April 1899
Klippan, Sweden
Died3 August 1979(1979-08-03) (aged 80)
Åre, Sweden
Nationality Sweden
Political party People's Party
Alma mater B.A. Lund University (1917)
MSc. Stockholm School of Economics (1919)
M.A. Harvard University (1923)
PhD Stockholm University (1924)
Known for Heckscher–Ohlin model
Heckscher–Ohlin theorem
Awards Nobel Memorial Prize in Economic Sciences (1977)
Scientific career
Fields Economics
Institutions University of Copenhagen (1925–1930)
Stockholm School of Economics (1930–1965)
Doctoral advisor Gustav Cassel

Bertil Gotthard Ohlin (Swedish:  [ˈbæ̌ʈːɪl ʊˈliːn] ) (23 April 1899 – 3 August 1979) was a Swedish economist and politician. He was a professor of economics at the Stockholm School of Economics from 1929 to 1965. He was also leader of the People's Party, a social-liberal party which at the time was the largest party in opposition to the governing Social Democratic Party, from 1944 to 1967. He served briefly as Minister for Trade from 1944 to 1945 in the Swedish coalition government during World War II. He was President of the Nordic Council in 1959 and 1964.


Ohlin's name lives on in one of the standard mathematical models of international free trade, the Heckscher–Ohlin model, which he developed together with Eli Heckscher. He was jointly awarded the Nobel Memorial Prize in Economic Sciences in 1977 together with the British economist James Meade "for their pathbreaking contribution to the theory of international trade and international capital movements".


Having received his B.A. from Lund University 1917 and his MSc. from Stockholm School of Economics in 1919. He obtained an M.A. from Harvard University in 1923 and his doctorate from Stockholm University in 1924. In 1925 he became a professor at the University of Copenhagen. In 1929 he debated with John Maynard Keynes, contradicting the latter's view on the consequences of the heavy war reparations payments imposed on Germany. (Keynes predicted a war caused by the burden of debt, Ohlin thought that Germany could afford the reparations.) The debate was important in the modern theory of unilateral international payments.

In 1930 Ohlin succeeded Eli Heckscher, his teacher, as a professor of economics, at the Stockholm School of Economics. In 1933 Ohlin published a work that made him world-renowned, Interregional and International Trade. In this Ohlin built an economic theory of international trade from earlier work by Heckscher and his own doctoral thesis. It is now known as the Heckscher–Ohlin model, one of the standard model economists use to debate trade theory.

The model was a break-through because it showed how comparative advantage might relate to general features of a country's capital and labor, and how these features might change through time. The model provided a basis for later work on the effects of protection on real wages, and has been fruitful in producing predictions and analysis; Ohlin himself used the model to derive the Heckscher–Ohlin theorem, that nations would specialize in industries most able to utilize their mix of national resources efficiently. Today, the theory has been largely disproved, yet it is still a useful framework by which to understand international trade.

In 1937, Ohlin spent half a year at the University of California, Berkeley, as a visiting professor. [1] [2] [3]

Later, Ohlin and other members of the "Stockholm school" extended Knut Wicksell's economic analysis to produce a theory of the macroeconomy anticipating Keynesianism.

Ohlin was party leader of the liberal Liberal People's Party from 1944 to 1967, the main opposition party to the Social Democrat Governments of the era, and from '44 to '45 was minister of commerce in the wartime government. His daughter Anne Wibble, representing the same party, served as Minister of Finance from 1991 to 1994.

In 2009, a street adjacent to the Stockholm School of Economics was named after Ohlin: "Bertil Ohlins Gata".

Heckscher–Ohlin theorem

The Heckscher–Ohlin Theorem, which is concluded from the Heckscher–Ohlin model of international trade, states: trade between countries is in proportion to their relative amounts of capital and labor. In countries with an abundance of capital, wage rates tend to be high; therefore, labor-intensive products, e.g. textiles, simple electronics, etc., are more costly to produce internally. In contrast, capital-intensive products, e.g. automobiles, chemicals, etc., are less costly to produce internally. Countries with large amounts of capital will export capital-intensive products and import labor-intensive products with the proceeds. Countries with high amounts of labor will do the reverse.

The following conditions must be true:

The theory does not depend on total amounts of capital or labor, but on the amounts per worker. This allows small countries to trade with large countries by specializing in production of products that use the factors which are more available than its trading partner. The key assumption is that capital and labor are not available in the same proportions in the two countries. That leads to specialization, which in turn benefits the country's economic welfare. The greater the difference between the two countries, the greater the gain from specialization.

Wassily Leontief made a study of the theory that seemed to invalidate it. He noted that the United States had a lot of capital; therefore, it should export capital-intensive products and import labor-intensive products. Instead, he found that it exported products that used more labor than the products it imported. This finding is known as the Leontief paradox.

Awards and decorations

See also

Significant publications

Interregional and international trade, 1933 Ohlin - Interregional and international trade, 1933 - 5175280.tif
Interregional and international trade, 1933


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  2. Findlay, Ronald; Jonung, Lars; Lundahl, Mats (2002). Bertil Ohlin: A Centennial Celebration, 1899–1999. MIT Press. ISBN   9780262062282.
  3. Toporowski, J. (29 July 2013). Michał Kalecki: An Intellectual Biography: Volume I Rendezvous in Cambridge 1899–1939. Springer. ISBN   9781137315397.
  4. Sköldenberg, Bengt, ed. (1969). Sveriges statskalender. 1969 (PDF) (in Swedish). Stockholm: Fritzes offentliga publikationer. p. 152. SELIBR   3682754.

Further reading

Party political offices
Preceded by
Chairman of the People's Party
Succeeded by
Political offices
Preceded by
Minister for Trade
Succeeded by
Preceded by
Laureate of the Nobel Memorial Prize in Economics
Served alongside: James E. Meade
Succeeded by