An elementary theory of global supply chains
By: Arnaud Costinot, Jonathan Vogel, Su Wang
Contributors: Vogel, Jonathan, 1979-; Wang, Su; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16936; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16936.
Publisher: National Bureau of Economic Research
Published: 2011
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "This paper develops an elementary theory of global supply chains.  We consider a world economy with an arbitrary number of countries, one factor of production, a continuum of intermediate goods, and one final good.  Production of the final good is sequential and subject to mistakes.  In the unique free trade equilibrium, countries with lower probabilities of making mistakes at all stages specialize in later stages of production.  Because of the sequential nature of production, absolute productivity differences are a source of comparative advantage among nations.  Using this simple theoretical framework, we offer a first look at how vertical specialization shapes the interdependence of nations"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/16/2011.

Includes bibliographical references.

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