The 4-quadrant diagram depicting the Heckscher-Ohlin model
The 4-quadrant diagram is remarkable for its ability to represent succinctly and precisely the full equilibrium in the two-good, two-factor, two-country Heckscher-Ohlin(H-O) model. With four factor allocations, two outputs and two factor prices in each country and the common goods price, the model has 17 variables in all. The diagram manages to explicitly show the equilibrium value of the key variables explicitly, with the remaining ones determined indirectly.I first introduce the basic diagram as applied to the autarky equilibrium. I the nextend it to the two-country equilibrium and briefly mention further applications. In the penultimate section, I give a brief history of the diagram