May 22, 2012

The rise of middle kingdoms

The new paper, "The Rise of Middle Kingdoms: Emerging Economies in Global Trade," by Gordon H. Hanson (March 2012) describes the change in international trade. Consider this graph of China top export products, for example:

Notice the growth of electronics. 
Two trends emerge from current trade patterns:
1) South-South trade is greater, and
2) There is a the return of comparative advantage as a driver of global commerce.

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