On Offshoring and Trade Deficit |
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| Authors: | Hamid Beladi Reza Oladi |
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| Affiliation: | 1. Department of Economics, University of Texas at San Antonio, , San Antonio, TX, 78249‐0633 USA;2. Department of Applied Economics, Utah State University, , Logan, UT, 84322 USA |
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| Abstract: | The paper constructs a general equilibrium model of North–South trade with nontraded goods, real exchange rate, and a continuum of components that North partly offshores to South. It is shown that a protectionary policy which restricts offshoring may have the unintended consequence of widening the trade deficit. |
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