We present a model that allows us to compare the effects that frictions involved in immigration and international outsourcing have on the skilled–unskilled wage inequality. We show that, for any given level of contractual friction in the production of intermediate goods, the wedge between the...

The Ricardian principle of comparative advantage has long been at the foundation of a wide range of economic models. In the new Internetworked economy where co-creational experiences of value is rapidly gaining momentum, the vision of this principle has weakened. We provide a framework to align...