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The Rise of China and India
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The Rise of China and India

Blessing or Curse for the Advanced Countries?

Livio Stracca
ECB, 2013
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Editorial Rating

7

Qualities

  • Analytical
  • Eye Opening
  • Overview

Recommendation

Not everyone believes that trade with emerging countries like China and India has been a good thing. Be it manufacturing auto parts, reading radiology scans or butchering chickens, no job seems immune to offshoring. Are advanced economies really better off trading with low-wage developing countries? Economist Livio Stracca crunches the numbers and offers some intriguing conclusions. While this statistically dense paper would have benefited from some editorial attention, getAbstract recommends it as a significant aid in understanding how trade between developed and developing economies affects employment and incomes in the rich world.

Summary

Emerging countries have reshaped global trade flows to such an extent that, beginning in 2010, trade between advanced and emerging economies (“North-South trade”) has outpaced trade among the advanced economies themselves (“North-North trade”). While the impact of these changes on advanced economies’ employment and income has generated much discussion, researchers have yet to understand fully the economic effects of the South’s imports, exports and competition on the North.

Conventional thinking asserts that trade always benefits both parties...

About the Author

Livio Stracca is an economist and senior adviser at the European Central Bank.

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