Question

1) When import-competing sectors are exposed to heightened competition from abroad, what kinds of people are made worse off? (You may wish to distinguish people by age, gender, education, and minority status.) Who, if anyone, is made better off? In your answer, draw on the empirical findings discussed in class

2) China, India, and other emerging market economies are exporting increasingly sophisticated goods to the United States. (By sophisticated, ” I mean their production processes are capital-intensive and/or human capital-intensive.) Explain how this phenomenon might be interpreted using Lerner diagrams. In your answer, indicate whether you think this phenomenon spells doom for the U.S. manufacturing sector.

3) What does theory tell us about the effects of unskilled labor migration into a particular region? Specifically, discuss the intra-regional effects of this immigration on unskilled wages, product mix, and the returns to other factors (including, possibly, skilled labor, capital,and/or land). In your answer, contrast the predictions of the specific factors model with those of the Heckscher -Ohlin model, and state the assumptions you are invoking when discussing each. Finally, drawing on readings and class discussions, summarize the empirical evidence on these prediction

Answer 1