TY  - JOUR
AU  - Krugman,Paul
TI  - Domestic Distortions and the Deindustrialization Hypothesis
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5473
PY  - 1996
Y2  - March 1996
UR  - http://www.nber.org/papers/w5473
L1  - http://www.nber.org/papers/w5473.pdf
N1  - Author contact info:
Paul R. Krugman
Department of Economics
Princeton University
Woodrow Wilson School
Princeton, NJ  08544
Tel: 609/258-4570
Fax: 609/258-2809
E-Mail: pkrugman@princeton.edu
AB  - It is widely believed that U.S. trade deficits have displaced workers from highly paid manufacturing jobs into less well-paid service employment, contributing to declining incomes for the nation as a whole.  Although proponents of this view do not usually think of it this way, this analysis falls squarely into the `domestic distortions' framework pioneered by Jagdish Bhagwati.  This paper models the deindustrialization hypothesis explicitly as a domestic distortions issue, and shows that while it makes conceptual sense it is of limited quantitative importance.
ER  -