Flat as a Pancake
The book The World Is Flat by Thomas L. Friedman covers how the spread of information technology is evening the playing field across the globe, hence, making the world flat. Areas such as Asia, India, and Africa are using recent education on info-tech to move their Production Possibility Frontier's outward. While this may seem bad because it provides higher competition to countries like ours, it is good because it shows economic growth around the world. This increases the amount of countries that can begin trading services and goods with us.
This article tells us that the new economies benefit from the trial-and-error that others have gone through in info-tech. They can now grow very quickly and become of greater value to the rest of the world in this area. Because a big part of economics is the interaction between economies, this is good news for everyone. Now time and employees will be used more efficiently in businesses of these emerging economies.
Labels:
economic models,
PPF
3 comments:
Nice tie-in to the PPF and world trade. Technology is clearly one of the most important factors, along with increasing human capital, that lead to expanding PPFs and economic growth.
As we know, trades among countries benefit the entire world. Different countries have different comparative advantage and disadvantage. Trades help us to make use of comparative advantage and reach the maximum revenues with minimum costs. As far as I know, most Big Four accounting firms export their tax paper work to India because it is much cheaper to complete those forms in India than that in the States. In our market, we find that there are a lot of made-in-China shoes because the shoes manufactures in China are more efficient than that in the States. Many technology goods are exported from Japan because of the same reason.
~Tian
While global economic growth is of great value, I believe it will take many years before American economics will absorb the cost associated with a change from a largely unskilled labor force to a skilled labor force. As more manufacturing and unskilled labor moves to countries like India and China, America must emphasize the importance of higher education to its younger generation. As manufacturing jobs continue to move overseas, the cost of retraining and educating the labor force will rise along with the cost of public assistance programs. However, I believe the cost we bare today will be more than compensated in the future as workers receive higher pay for better jobs.
While I agree that global economic growth is a good thing, how do we, as Americans, survive until time and employees are used more efficiently in businesses of these emerging economics?
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