ABSTRACT
National economies are becoming deeply connected. You probably no-tice these connections most as a consumer, since many of the goods you buy are produced, either in whole or in part, in a foreign country. This is certainly the case for me. Most of my clothes are manufactured in Bangladesh and other developing countries. My computer was assembled in the Philippines from components that were designed and manufactured in at least five other countries. Thus, my consumption (and yours) has become internationalized. And what is true about our consumption is obviously also true about production. Although we once thought in terms of national firms, it makes less and less sense to do so. Is the iPhone, for example, an American product? Apple designs the phone in Cupertino, California. It manufactures the phone in a plant in China. The components that go into the phone are in turn produced across the Pacific basin. Production, too, has become internationalized.
