The Great Unbundling

The model of comparative advantage built on the works of Adam Smith and David Ricardo has rarely been challenged as the predominant rationale for international trade. With individual tasks of all sorts increasingly shipped overseas, some economists seek new theories to explain the logic behind the offshoring of services. Gene Grossman and Esteban Rossi-Hansberg, for example, have labeled offshoring as a “new paradigm” that can benefit the economy with growth in productivity but also hurt some individual workers. The ease of offshoring any task could evolve, warn the two economists, and tasks that seem safe from foreign competition today may not be so tomorrow, regardless of skill involved. New technology can present surprises, good or bad, for any occupation. – YaleGlobal