Offshoring in a Ricardian World

Andres Rodriguez-Clare

American Economic Journal: Macroeconomics, 2010, vol. 2, issue 2, 227-58

Abstract: This paper proposes a Ricardian model to understand the short-run and long-run aggregate effects of increased fragmentation and offshoring on rich and poor countries. The short-run analysis shows that, when offshoring is sufficiently high, further increases in offshoring benefit the poor country and hurt the rich country. But these effects may be reversed in the long run as countries adjust their research efforts in response to increased offshoring. In particular, in the long run, the rich country always gains from increased offshoring, whereas poor countries see their static gains partially eroded by a decline in their research efforts. (JEL F12, F23, L24, M16)

JEL-codes: F12 F23 L24 M16 (search for similar items in EconPapers)
Date: 2010
Note: DOI: 10.1257/mac.2.2.227
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Citations: View citations in EconPapers (33)

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Related works:
Working Paper: Offshoring in a Ricardian World (2007)
Working Paper: Offshoring in a Ricardian World (2007)
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