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We show that in a fully integrated economy, in which there is free mobility of goods and factors, each member’s share of total output will equal its shares of total stocks of productive factors (i.e., physical and human capital). We label this result the equal-share relationship. This...
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Offshoring of US jobs is controversial. Critics fear that offshoring will lead to lost jobs and lower domestic wages at … into offshoring. Given a shock that lowers offshoring costs, the theory predicts that domestic wages rise at firms that … offshore relative to domestic wages at firms that do not. The theory also predicts that domestic employment could rise or fall …
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