Does offshore sourcing by domestic producers destroy jobs? Does it lower wages? To a growing number of observers the answer to both questions appears to be affirmative. This paper examines the issue in the context of a conventional trade framework that has been amended to allow production to be...

The world economy has become more open and integrated in recent years. Countries are more engaged in international trade and the importance of tradables relative to non-tradables in national output is rising everywhere. Capital flows more freely among countries and workers cross borders more...

What is the impact of import competition from low-wage countries (LWCs) on inflationary pressure in Europe? This paper examines whether labor-intensive exports from emerging Europe, Asia, and other global regions have a uniform impact on producer prices in Germany, France, Italy, Sweden, and the...

Dieser Beitrag soll einen Überblick und eine Systematik im Hinblick auf die aktuellen Beiträge zum Phänomen der Fragmentierung geben. Während man im Zusammenhang mit der Ausweitung des Nord-Süd-Handels von einer "horizontalen Globalisierung" spricht, gilt Fragmentierung als Ausdruck einer...

The policy debate views offshoring as job destruction. Theoretical models of offshoring mostly assume full employment. We develop a model of task trade that allows for equilibrium unemployment. In this model, there are two margins of adjustment. At the extensive margin, moving tasks offshore...

The economic effects of a pandemic crucially depend on the extend to which countries are connected in global production networks. In this paper we incorporate production barriers induced by COVID-19 shock into a Ricardian model with sectoral linkages, trade in intermediate goods and sectoral...

Germany exhibits a strong reduction in domestic manufacturing production depth (bazaar effect). I argue that this reflects an unbundling of comparative advantage. Using a model where Ricardian plus Heckscher-Ohlin-type comparative advantage relates to fragments of production, I compare a trading...

The labour markets in the developed countries have experienced two fundamental changes in recent years. Firstly, high-skilled workers have gained at the expense of low-skilled workers, which manifests itself in a rising skill premium and/or a rising disparity in the unemployment rates of these...

This paper investigates both aggregate and distributional impacts of the trade integration of China, India, and Central and Eastern Europe in a quantitative multi-country multi-sector model, comparing outcomes with and without factor market frictions. Under perfect within-country factor...

Advanced industrial countries have been exhibiting a steady decline of the labor income shares in the last two decades. We explain this phenomenon by resorting to the old Stolper-Samuelson theorem. The conclusions concerning the impact of free trade on the income distribution are unambiguous in...