The bazaar effect, unbundling of comparative advantage, and migration

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 1932

Classification and Topics

• Classification: Wirtschaft ; Neoclassical Models of Trade ; Trade and Labor Market Interactions ; International Migration
• Subject: comparative advantage ; offshoring ; outsourcing ; globalization ; migration ; Wertschöpfung ; Industrielle Produktion ; Lohnfertigung ; Outsourcing ; Außenwirtschaft ; Auslandsproduktion ; Globalisierung ; Komparativer Kostenvorteil ; Arbeitsteilung ; Mindestlohn ; Internationale Arbeitsmobilität ; Theorie ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kohler, Wilhelm K.
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/25977
• Last update: 10.03.2025, 11:44 AM CET