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Hardcover | $32.00 Short | £26.95 | 160 pp. | 5.375 x 8 in | 26 figures, 12 tables | December 2009 | ISBN: 9780262013833
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Offshoring in the Global Economy

Microeconomic Structure and Macroeconomic Implications


In the early 1990s, trade and labor economists, noting the fall in wages for low-skilled workers relative to high-skilled workers, began to debate the impact of trade on wages. This debate--which led to a sometimes heated exchange on the role of trade versus the role of technological change in explaining wage movements--continues today, with the focus now shifting to workers in the middle of the wage distribution. In Offshoring in the Global Economy, noted economist Robert Feenstra offers a synthesis of fifteen years of research--linking his own work to related research by others--on the globalization of production and its relation to wage movements. Feenstra first contrasts the views of trade economists Paul Krugman and Edward Leamer, who both relied (to different ends) on the Heckscher–Ohlin model. He then examines the new type of trade models focusing on the transfer of production processes across countries. Feenstra suggests a new calculation of the factor content of trade that demonstrates the durability of the Heckscher–Ohlin model. Feenstra then examines the macroeconomics of offshoring, focusing on business cycle volatility, prices, and productivity. Finally, he discusses the broader implications of both empirical and theoretical work on offshoring and suggests directions for future research.

About the Author

Robert C. Feenstra is Professor of Economics and C. Bryan Cameron Distinguished Chair in International Economics at the University of California, Davis. He directs the International Trade and Investment Program at the NBER and is the author of Advanced International Trade: Theory and Evidence and Offshoring in the Global Economy: Microeconomic Structure and Macroeconomic Implications (MIT Press, 2010).


“Robert Feenstra has been a pioneer in the economic analysis of offshoring. His Ohlin lectures provide an elegant synthesis of how economists think about the globalization of production tracing its effects on the structure of wages the factor context of trade the measurement of productivity and the volatility of the macroeconomy. This volume is essential reading for scholars and policy analysts with an interest in how international trade transforms market economies.”
Gordon Hanson, School of International Relations and Pacific Studies, University of California San Diego