There is also impact on the efficacy of US economic policy tools. Traditional methods of stimulating consumer demand are now less effective. They might cause a rebound in sales, but the follow- through to domestic employment is diluted as the response to demand is met by foreign labor. There is now a large new "leakage," as increases in domestic demand are met by offshore production.
Moreover, as US capital and technology are shifted to the employment of labor abroad, there is less boost to US consumer demand from productivity-based growth in real income. The effect, then, of offshoring production for US markets is to weaken the effectiveness of traditional economic policy tools.



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