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Integration of Trade and Disintegration of Production in the Global Economy

  • Robert C. Feenstra

The last few decades have seen a spectacular integration of the global economy through trade. The rising integration of world markets has brought with it a disintegration of the production process, however, in which manufacturing or services activities done abroad are combined with those performed at home. The author compares several different measures of foreign outsourcing and argues that they have all increased since the 1970s. He also considers the implications of globalization for employment and wages of low-skilled workers and for trade and regulatory policy, such as labor standards.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.12.4.31
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Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 12 (1998)
Issue (Month): 4 (Fall)
Pages: 31-50

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Handle: RePEc:aea:jecper:v:12:y:1998:i:4:p:31-50
Note: DOI: 10.1257/jep.12.4.31
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  1. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," NBER Working Papers 5098, National Bureau of Economic Research, Inc.
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  19. Paul BAIROCH & Richard KOZUL-WRIGHT, 1996. "Globalization Myths: Some Historical Reflections On Integration, Industrialization And Growth In The World Economy," UNCTAD Discussion Papers 113, United Nations Conference on Trade and Development.
  20. Feenstra, R.C. & Hanson, G.H., 1995. "Foreign Investment, Outsourcing and Relative Wages," Papers 95-14, California Davis - Institute of Governmental Affairs.
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  37. George A. Akerlof & Andrew K. Rose & Janet L. Yellen & Helga Hessenius, 1991. "East Germany in from the Cold: The Economic Aftermath of Currency Union," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 1-106.
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