Thursday, 18 October 2018

Innovation and production in the global economy: The consequences of recent shocks

a column by Costas Arkolakis, Natalia Ramondo, Andres Rodríguez-Clare and Stephen Yeaple for VIX: CEPR’s Policy Portal

One consequence of the last decades of globalisation is that, thanks to multinational firms, goods are increasingly being produced far from where ideas are created.

Using general equilibrium modelling, this column analyses the welfare and distributional effects of the recent wave of protectionism. Central to the results is the flexibility that multinational firms have in locating their innovation and production activities around the globe.

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