Trading Tasks: A Simple Theory of Offshoring
Trading Tasks: A Simple Theory of Offshoring
Trading Tasks: A Simple Theory of Offshoring
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Introduction The Model ConclusionConclusionIn the past:Countries produced mostly complete products that they consumed and tradedwith other nationsToday:Drastic reductions in transport and communication costs have facilitated directtrade in tasksTraditional benets from worker specialization plus gains generated when tasksare performed at the lowest cost locationProposed a new paradigm where task trade takes center stage and:<strong>Offshoring</strong> <strong>of</strong> a particular factor's tasks is equivalent t<strong>of</strong>actor-augmenting technological progress<strong>Offshoring</strong> may lead to Pareto gains for source countryGrossman and Rossi-Hansberg (Princeton University) A <strong>Simple</strong> <strong>Theory</strong> <strong>of</strong> <strong>Offshoring</strong> March, 2010 17 / 17
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