How state like Missisibe get wealth:
i. Everyone starts working (people who don’t work previously enter the labor market)
ii. People get more productive (technology improvement)
*Thus people fear that technology loses job.
It has nothing to do with trade: It’s the most easy, low-skillful jobs that disappear.
Eg. Chips
No people now supervise the chips, we lost jobs!
What’s the problem?
Terrible jobs are replaced by higher quality jobs
Average wages of service sector than that of manufacture sector we’ve lost.
People who are making money are those who don’t have these skills in the past.
*Technological change today is really different with the technological change in the past.
A lot of technological change today doesn’t necessarily benefit everybody like it was in the past; it requires much unique skills to take advantage of them.
The international trade:
i. It’s true that we export corns like 3rd world country, but if you look the value of what we export, the tops are high technology products.
ii. Trade doesn’t lies on that. Look in the past, who knew there will be jobs in biotechnology? How could you imagine what kind of jobs will appear in the future?
Job Replacement:
People who engage in the jobs are those who benefit from trade in the first place.
There’s not a fixed number of jobs (Jobs are created)
Exports-Imports
“Trade Balance”
Goods Services (used to make up only a small fraction of GDP, now 30%)
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