DP7775 Trade-in-goods and trade-in-tasks: An Integrating Framework
| Author(s): | Richard Baldwin, Frédéric Robert-Nicoud |
| Publication Date: | April 2010 |
| Keyword(s): | globalisation, offshoring, trade in tasks, trade theory |
| JEL(s): | F11, F12, F16 |
| Programme Areas: | International Trade and Regional Economics |
| Link to this Page: | cepr.org/active/publications/discussion_papers/dp.php?dpno=7775 |
Our paper integrates results from trade-in-task theory into mainstream trade theory by developing trade-in-task analogues to the four famous theorems (Heckscher-Ohlin, factor price equalisation, Stolper-Samuelson, and Rybczynski) and showing the standard gains-from-trade theorem does not hold for trade-in-tasks. We show trade-in-tasks creates intraindustry trade in a Walrasian economy, and derive necessary and sufficient conditions for analyzing the impact of trade-in-tasks on wages and production. Extensions of the integrating framework easily accommodate monopolistic competition and two-way offshoring/trade-in-tasks.