Abstract
<jats:title>Abstract</jats:title> <jats:p>This chapter covers the Specific Factors model (also called the Ricardo–Viner model), which extends the Ricardian approach by allowing multiple inputs. Some inputs, like capital, are tied to particular sectors, but labor remains mobile. The framework illustrates how trade affects both overall welfare and the distribution of income across factors such as capital or land. Shifts in relative goods prices alter the returns to these sector-specific factors, generating winners and losers within each country. In particular, the chapter aims to clarify the political economy dimension of trade: While nations as a whole gain from openness, certain groups may experience real income losses, which helps explain opposition to liberalization. Graphical analysis demonstrates production possibilities, equilibrium determination, and distributional outcomes. By combining theoretical clarity with distributional insights, the model highlights why trade generates controversy and why compensatory measures may be required to secure broad support.</jats:p>