Saturday, February 21, 2004

international relations - Outsourcing saves jobs

The vilified US economist George Mankiw, one of George W. Bush's economic advisors, claimed earlier this month that outsourcing saves jobs. Everybody disagreed with him, apart from the British weekly The Economist.
"Mr Mankiw's proposition, in essence, is the law of comparative advantage, first postulated by David Ricardo two centuries ago and demonstrated to astonishing effect since," writes The Economist. The argument might be correct, but it will be hard for presidential candidates and trade union leaders to explain this to their constituencies.

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