The purpose of this paper is to incorporate the currently mushrooming phenomenon of outsourcing into the standard two-sector, two-factor Heckscher-Ohlin model of international trade. We first show how outsourcing modifies a firm's production function, and then demonstrate that outsourcing...

We offer a new paradigm to understand the effects of trade on factor rewards. It utilizes the classical-Keynesian model, and shows that normally a country's trade deficit hurts labor by lowering the real wage, but benefits the owners of capital. The effects of tariffs on factor rewards and...

The purpose of this paper is to explode the myth of free trade. Productivity and real wages in the U.S. rose sharply between 1950 and 1972, but since then real earnings have been falling in spite of a continuous rise in productivity. It turns out that America was more or less a closed economy...

This paper develops a two-sector general equilibrium model to examine the impact of technical progress, factor accumulation, labor growth, unemployment, trade policy, and the government's antipoverty programs on the rate of poverty. The results are then tested empirically using the data...

The paper examines three popular models that form the foundation of modern economics. The author concludes that two of the three, the classical and the Keynesian, are seriously deficient in logic, whereas the third, dealing with gains from trade, is partially lacking in logic. Classical and...

Economists universally regard tariffs to be inflationary and free trade to be deflationary, a view that this paper challenges. It is argued that while protectionism has generally created inflation in developing economies, the experience of the United States was totally different. Tariffs in the...

This paper argues that not a single proposition of the modern theory of free trade is upheld by the recent experience of the United States. Freer trade is supposed to raise GNP growth and productivity growth as well as the living standard. Until 1972, when the U.S. was practically a closed...