International Outsourcing under Monopolistic Competition: Winners and Losers

We show that, even with flexible domestic wages, international outsourcing may worsen the welfare of the home country and reduce the profits of all firms. If wages are rigid, outsourcing is welfare-improving if and only if the sum of the “trade creation” effect and the “exploitation effect” exceeds the “trade diversion” effect. A wage subsidy may improve welfare. We also extend the model to a two-period framework. Delaying outsourcing can be gainful because the fixed cost of outsourcing may fall over time. A social planner would choose a different speed of outsourcing than that achieved under laissez-faire.offshoring, outsourcing, international trade, wage rigidity, monopolistic competition

Existence of orthogonal geodesic chords on Riemannian manifolds with concave boundary and homeomorphic to the N-dimensional disk

In this paper we give a proof of the existence of an orthogonal geodesic chord on a Riemannian manifold homeomorphic to a closed disk and with concave boundary. This kind of study is motivated by the link of the multiplicity problem with the famous Seifert conjecture (formulated in 1948) about multiple brake orbits for a class of Hamiltonian systems at a fixed energy level.Comment: 59 pages, 3 figures. To appear on Nonlinear Analysis Series A: Theory, Methods & Application