TY  - JOUR
AU  - Markusen,James R.
AU  - Strand,Bridget
TI  - Trade in Business Services in General Equilibrium
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12816
PY  - 2007
Y2  - January 2007
UR  - http://www.nber.org/papers/w12816
L1  - http://www.nber.org/papers/w12816.pdf
N1  - Author contact info:
James R. Markusen
Department of Economics
University of Colorado
Boulder, CO 80309-0256
Tel: 303/492-0748
Fax: 303/492-8960
E-Mail: james.markusen@colorado.edu

Bridget Strand
Department of Economics
University of Colorado
Boulder CO 8-0309-0256
E-Mail: bridget.strand@colorado.edu
AB  - Trade in business services has been attracting attention from academic researchers, policy makers, and business journalists.  While there are many anecdotes, there has been little in the way of formal theory applied to this issue.  In this paper, we adapt a general model of fragmentation of production activities to try to capture the specific features of business services. Following a general discussion, we calibrate a numerical general-equilibrium simulation model to a situation in which both trade and foreign investment in services are initially banned to technically infeasible.  We then compute three counter-factual scenarios: one in which trade but not investment in services is feasible or allowed, one in which investment but not trade is allowed, and onein which both trade and investment in services are allowed.
ER  -