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Working Paper
Comparative and absolute advantage in the Asia-Pacific region
According to classical Ricardian trade theory, overall productivity differences between countries are manifested as differences in real labor incomes (absolute advantage), while the sectoral pattern of productivity differences determines trade patterns (comparative advantage). This paper investigates both of these principles, with a focus on the Pacific Basin. I first examine the trends and relationships between productivity and labor compensation in aggregate manufacturing. Wages and productivity are broadly related, as the theory of absolute advantage suggests. The paper then tests the ...
Journal Article
Does trade with low-wage countries hurt American workers?
Does trade with low-wage countries steal American jobs and, hence, rob American workers of higher wages and a higher standard of living? Most economists think trade is not guilty as charged. Instead, they cite concepts such as comparative and absolute advantage and differences in productivity to explain why trade, particularly trade with low-wage countries, doesn't pack the economic wallop its critics claim. In this article, Steve Golub shows that popular fears are based on a misunderstanding of the causes and effects of wage disparities.
Journal Article
Productivity and labor costs in newly industrializing countries