Trade, Jobs, and Wages

Paul Krugman () and Robert Lawrence

No 4478, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: There is a broad consensus among US opinion leaders that our economic problem is largely one of failures of international competition -- that trade deficits have eroded our manufacturing base, that inability to sell on world markets has been a major drag on economic growth, and that imports from low-wage countries have caused a widening of income inequality. This paper summarizes recent evidence on these issues, and shows that while there may be a grain of truth to each complaint, in each case the effect is quantitatively minor. The arithmetic of 'competitiveness' just doesn't work.

JEL-codes: F00 (search for similar items in EconPapers)
Date: Written
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