Total elimination of absolute advantage

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Reference no: EM1375089

The job losses to foreign nations have not been limited to low skilled rankings. And that may not necessarily be a real concern in long run.

There are more than three Million white-collar jobs that are expected to move overseas in the next decade. Obviously in IT, and other skilled positions: JP Morgan, and Morgan Stanley have hired hundreds of equity research analysts in Asia since 2003.
In the early part of 2003 GE also hired 300 hired lawyers in India to handle their internal corporate legal matters.

How should we expect this phoenomenon affect the US economy at the macro-level, short run and long run?

Areas of focus:
1)creative destruction
2)reduction in absolute advantage, or total elimination of absolute advantage, will never have any impact on the law of comparative advantage, which is the only relevant concept to trade.
3)Aggregate Expenditures = Aggregate Income

Reference no: EM1375089

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