Principles of Economics- Mankiw (5th) 193

Principles of Economics- Mankiw (5th) 193 - CHAPTER 9 A P P...

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CHAPTER 9 APPLICATION: INTERNATIONAL TRADE 199 The inventor is hailed as a genius. Because steel is used in so many products, the invention lowers the cost of many goods and allows all Isolandians to enjoy a higher standard of living. Workers who had previously produced steel do suffer when their factories close, but eventually they find work in other industries. Some become farmers and grow the wheat that the inventor turns into steel. Others en- ter new industries that emerge as a result of higher Isolandian living standards. Everyone understands that the displacement of these workers is an inevitable part of progress. After several years, a newspaper reporter decides to investigate this mysteri- ous new steel process. She sneaks into the inventor’s factory and learns that the in- ventor is a fraud. The inventor has not been making steel at all. Instead, he has the course of about three years we changed from being a country run like a Polish shipyard into one that could be in- ternationally competitive.” Since the 1980s, Hong Kong’s and Singapore’s enormous successes as
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This note was uploaded on 07/30/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.

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