Monday, May 08, 2006

Mankiw on Trade and Outsourcing

Two years ago Greg Mankiw got a lot of heat for publicly suggesting that (gasp!) outsourcing jobs to India could be an example of creative destruction, noting that it's better if we don't try to hang onto jobs that the U.S. no longer holds a comparative advantage in.

He finally sets the record straight in this post. If you neither believe that free trade makes everyone better off in the long run, nor that free movement of labor does, than that's a failure of we, the economists, to educate the public. But if you believe in free trade for goods but not of labor (or like some real geniuses, the other way around), then you're just a stubborn person in denial.

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