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On Offshoring and Trade Deficit
Author(s) -
Beladi Hamid,
Oladi Reza
Publication year - 2014
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12100
Subject(s) - offshoring , economics , exchange rate , general equilibrium theory , balance of trade , international economics , monetary economics , keynesian economics , macroeconomics , outsourcing , business , marketing
The paper constructs a general equilibrium model of N orth– S outh trade with nontraded goods, real exchange rate, and a continuum of components that N orth partly offshores to S outh. It is shown that a protectionary policy which restricts offshoring may have the unintended consequence of widening the trade deficit.