Quotation of the Day…

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… is from page 34 of Dartmouth economist Teresa Fort’s important 2023 Journal of Economic Perspectives paper, “The Changing Firm and Country Boundaries of US Manufacturers in Global Value Chains” (references removed; emphasis added):

[T]rade statistics and theory need to expand to capture the realities of goods production across firm and country boundaries. These activities affect our understanding of trade and foreign direct investment, as well as aggregate measures of domestic value added and GDP. The potential implications are far-reaching: increased specialization within the production of a particular industry or good provides additional gains from trade. When such specialization entails reallocation into early production stages, like design and innovation, offshoring can even lead to dynamic gains, as the returns to innovation rise, inducing growth in R&D and ideas that beget more ideas.