2006 TradingTasks

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Subject Headings: Task Trading, Low-Skilled Task, High-Skilled Task, Low-Skilled Labor, High-Skilled Labor.

Notes

Cited By

2006

  • (Baldwin, 2006) ⇒ Richard Baldwin. (2006). “Globalisation: the great unbundling(s)." In: Economic Council of Finland, 20.
    • QUOTE: Grossman and Rossi-Hansberg (2006) argue that a new paradigm is needed to fully evaluate the implications of offshoring. Their version of the new paradigm, which will surely transform the debate on offshoring, decomposes the impact of offshoring on wages into three effects that might be called the terms of trade effect, the jobs effect and the productivity effect.

Quotes

Abstract

For centuries, most international trade involved an exchange of complete goods. But, with recent improvements in transportation and communications technology, it increasingly entails different countries adding value to global supply chains, or what might be called “trade in tasks." We propose a new conceptualization of the global production process that focuses on tradable tasks and use it to study how falling costs of offshoring affect factor prices in the source country. We identify a productivity effect of task trade that benefits the factor whose tasks are more easily moved offshore. In the light of this effect, reductions in the cost of trading tasks can generate shared gains for all domestic factors, in contrast to the distributional conflict that typically results from reductions in the cost of trading goods.


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