DMCA
Trading tasks: A simple theory of o¤shoring (2008)
| Venue: | American Economic Review |
| Citations: | 10 - 1 self |
BibTeX
@ARTICLE{Grossman08tradingtasks:,
author = {Gene M. Grossman and Esteban Rossi-hansberg},
title = {Trading tasks: A simple theory of o¤shoring},
journal = {American Economic Review},
year = {2008}
}
Share
 |
 |
 |
 |
||
OpenURL
Abstract
For centuries, most international trade involved an exchange of complete goods. But, with recent improvements in transportation and communications technology, it increas-ingly entails di¤erent countries adding value to global supply chains, or what might be called trade in tasks.We propose a theory of the global production process that focuses on tradable tasks and use it to study how falling costs of o¤shoring a¤ect factor prices in the source country. We identify a productivity e¤ect of task trade that bene ts the factor whose tasks are more easily moved o¤shore. In the light of this e¤ect, reductions in the cost of trading tasks can generate shared gains for all domestic factors, in contrast to the distributional conict that typically results from reductions in the cost of trading goods.
Keyphrases
trading task simple theory trading good source country complete good productivity ect shared gain communication technology global supply chain task trade recent improvement international trade distributional conict di erent country global production process ect factor price domestic factor tradable task
