Chapter

Globalization I: The Shock of Liberalization

John Sutton

in Competing in Capabilities

Published in print October 2012 | ISBN: 9780199274536
Published online January 2013 | e-ISBN: 9780191746123 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199274536.003.0004

Series: Clarendon Lectures in Economics

Globalization I: The Shock of Liberalization

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This chapter explores the following assumption: you can't make something out of nothing. In other words, not all costs are labour costs. All manufactured exports require for their production some material inputs, whether in the form of raw material, components, or bought-in sub-assemblies. This simple feature is enough to drive a wedge between the economics of ‘productivity’ and the economics of ‘quality’, and in so doing, it makes clear why the new literature on Quality and Trade actually matters.

Keywords: labour costs; manufactured exports; production; productivity; quality

Chapter.  8917 words.  Illustrated.

Subjects: Economic Development and Growth

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