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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/25977
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| Title: | | The bazaar effect, unbundling of comparative advantage, and migration  |
| Authors: | | Kohler, Wilhelm K. |
| Issue Date: | | 2007 |
| Series/Report no.: | | CESifo working paper 1932 |
| Abstract: | | Germany exhibits a strong reduction in domestic manufacturing production depth (bazaar effect). I argue that this reflects an unbundling of comparative advantage. Using a model where Ricardian plus Heckscher-Ohlin-type comparative advantage relates to fragments of production, I compare a trading equilibrium where all fragments are located within a country with an equilibrium where input sub-bundles may be traded (offshoring). The model allows for several goods and two fragments, produced with high-skilled and low-skilled labor. I address wage and welfare effects under flexible wages, and under a minimum wage. I also explore trade policy implications and compare offshoring to migration. |
| Subjects: | | comparative advantage offshoring outsourcing globalization migration |
| JEL: | | F11 F16 F22 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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