Does economics need a new theory of offshoring?
Jan 18th 2007 |
GLOBALISATION is a big word but an old idea, most economists will say, with a jaded air. The phenomenon has kept the profession’s number-crunchers busy, counting the spoils and how they are divided. But it has left the blackboard theorists with relatively little to do. They are confident their traditional models of trade can handle it, even in its latest manifestations. For example, Greg Mankiw, of Harvard University, has concluded that “services offshoring fits comfortably within the intellectual framework of comparative advantage built on the insights of Adam Smith and David Ricardo.”