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The Economics of Outsourcing: How Should Policy Respond?

  • Thomas I. Palley

According to Research Associate Thomas A. Palley, global outsourcing represents a new economic challenge that calls for a new set of institutions. In this brief, he expands upon the problems of offshore outsourcing as outlined in Public Policy Brief no. 86 and focuses on the microeconomic foundations. He argues that outsourcing is a central element of globalization that is best understood as a new form of competition. Palley urges policymakers to understand the economic basis of outsourcing in order to develop effective policies, and suggests that they focus on enhancing national competitiveness and establishing new rules that govern the nature of global competition.

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File URL: http://www.levyinstitute.org/pubs/ppb_89.pdf
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Paper provided by Levy Economics Institute in its series Economics Public Policy Brief Archive with number ppb_89.

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Date of creation: Jan 2007
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Handle: RePEc:lev:levppb:ppb_89
Contact details of provider: Web page: http://www.levyinstitute.org

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  1. James Tobin, 1975. "Keynesian Models of Recession and Depression," Cowles Foundation Discussion Papers 387, Cowles Foundation for Research in Economics, Yale University.
  2. Gregory Mankiw, N. & Swagel, Phillip, 2006. "The politics and economics of offshore outsourcing," Journal of Monetary Economics, Elsevier, vol. 53(5), pages 1027-1056, July.
  3. William R. Cline, 1997. "Trade and Income Distribution," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 58, December.
  4. Paul A. Samuelson, 2004. "Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization," Journal of Economic Perspectives, American Economic Association, vol. 18(3), pages 135-146, Summer.
  5. Lori G. Kletzer, 2001. "Job Loss from Imports: Measuring the Costs," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 110, December.
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