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Traditional literature emphasizes the role of foreign capital, especially foreign direct investment (FDI) in explaining the high growth rates that many emerging economies have enjoyed during 1990s and 2000s. The present paper accepts this conventional wisdom but argues that the FDI has also created problems of urban sprawl and congestion that would not be so intense if economic development had primarily come from domestic sources. This is because the FDI is typically concentrated in urban areas that abound in manufacturing and it neglects the rural areas where agriculture predominates. The paper suggests that a small tax on foreign capital tends to mitigate the side effects of foreign investment.

It is well known that nations with high trade deficits normally have higher interest rates than those with surplus or balanced trade. However, such has not been the case with the USA, which has seen a relentless trade deficit since 1982. Its interest rates have been lower than those prevailing in many trade-surplus nations. Furthermore, these rates fell even as the trade shortfall shot up, generating an interest-rate paradox. This paper demonstrates that, unlike for other nations, the rising trade deficit itself became the cause of lower US interest rates, and this happened because of the world's strong interest in maintaining a high value of the dollar.

We construct a general equilibrium model of trade and show that an economy can experience technological progress and declining real wages provided that it is open to trade and import demand is sufficiently inelastic in both countries. This is a puzzling outcome so far as marginal productivity paradigm is concerned. In this context we demonstrate that new technology works differently in a closed vs an open economy. In an open economy, technical improvements may generate a fall in labor real earnings, but not in a closed economy. In addition, technical progress in manufacturing must increase manufacturing–service wage gap according to marginal productivity doctrine. We show that the opposite outcome can occur theoretically in an open economy—yet another seemingly puzzling labor market outcome.

Objective Quantitative sensory testing (QST) and questionnaire-based assessments have been used to demonstrate features of neuropathic pain in subjects with musculoskeletal pain. However, their direct relationship has not been investigated in the community. The purpose of this study was to conduct an observational study to describe the characteristics of joint pain and to examine the relationship between QST measures and the PainDETECT Questionnaire (PD-Q). Methods Warm detection, heat pain, and mechanical pain thresholds as well as mechanical pain sensitivity over the sternum were determined and the PD-Q scores were calculated in a cross-sectional study of 462 participants in the Chingford Study. Comparisons were made between subjects with and those without joint pain. Logistic regression modeling was used to describe the association between neuropathic pain features, as determined by the PD-Q score, and each of the QST measures individually, adjusting for age, body mass index, and use of pain-modifying medications. Results A total of 66.2% of the subjects reported recent joint pain, with a median average pain severity of 5 of 10. There was increased sensitivity to painful stimuli in the group with pain as compared to the pain-free group, and this persisted after stratification by pain-modifying medication use. While only 6.7% of subjects had possible neuropathic pain features and 1.9% likely neuropathic pain features according to the standard PD-Q thresholds, features of neuropathic pain were common and were present in >50% of those reporting pain of at least moderate severity. Heat pain thresholds and mechanical pain sensitivity were significantly associated with features of neuropathic pain identified using the PD-Q, with an odds ratio (OR) of 0.88 (95% confidence interval [95% CI] 0.79–0.97; P = 0.011) and an OR of 1.24 (95% CI 1.04–1.48; P = 0.018), respectively. Conclusion QST measures and the PD-Q identified features of neuropathic pain in subjects in this community-based study, with significant overlap between the findings of the two techniques.

Using a Heckscher–Ohlin model, this paper re-examines Robert Mundell's famous thesis that free trade and unimpeded capital mobility are perfect substitutes. Under very general conditions which, according to many economists, have caused international convergence of factor rewards, we show that in a polluted environment free trade is inferior to free international investment. This happens even though commodity prices and factor rewards are the same with both policies. The practical side of our thesis is that the world will be better off by reducing the volume of trade while removing all barriers to foreign direct investment that at present hamper the service industries.

The purpose of this paper is to incorporate the currently mushrooming phenomenon of outsourcing into the standard two-sector, two-factor Heckscher–Ohlin model of international trade. We first show how outsourcing modifies a firm's production function, and then demonstrate that outsourcing generally raises the return to capital and lowers the real wage, although the nation's GDP rises in proportion to the value-added in the outsourcing industry. Furthermore, the output of the outsourcing sector may actually fall even though its unit cost goes down; the output of the other sector then rises. By contrast, employment in the outsourcing sector may actually rise.

Outsourcing has become an increasingly contentious subject ever since N. Gregory Mankiw remarked in 2004 that outsourcing is just another way of doing international trade, and must be beneficial to the nation, including the workers. We construct a simple two-sector specific-factor model and explore the validity of Mankiw's remarks. We find his ideas are valid when the country does not produce any outsourced factor's work at home in that both the laborers and the nation benefit. But when some outsourced factor cum intermediate good is also produced at home, the nation still benefits but the workers may suffer.

We offer a new paradigm to understand the effects of trade on factor rewards. It utilizes the classical-Keynesian model, and shows that normally a country’s trade deficit hurts labor by lowering the real wage, but benefits the owners of capital. The effects of tariffs on factor rewards and employment are opposite to those of the trade deficit, which falls with a rise in the tariff rate. Countries with trade shortfalls unambiguously benefit from their tariffs, because laborers far outnumber capitalists, who suffer from the declining interest rate. Thus, tariffs lead to a rise in social welfare in trade-deficit countries.

Mechanical loading is an important regulator of bone formation and bone loss. Decreased osteoblast number and function are important cellular mechanisms by which mechanical disuse leads to decreased bone formation. Decreased osteoblast number may be a result of decreased osteoprogenitor proliferation, differentiation, or both. However, the effects of cellular level physical signals on osteoprogenitors are not well understood. In this study, we examined the effects of loading induced oscillatory fluid flow (OFF), a potent regulator of osteoblastic cell function, on marrow stromal cells (MSCs). MSCs subjected to OFF exhibited increased intracellular Ca2+ mobilization. In addition, MSCs exhibited increased proliferation and increased mRNA levels for osteopontin and osteocalcin genes. Collagen I and core binding factor 1 mRNA levels did not change. MSCs subjected to OFF also exhibited decreased alkaline phosphatase activity. These results suggest that MSCs are mechanosensitive and that Ca2+ may play a role in the signaling pathway.

The paper explains most, if not all, observations made by the empirical literature regarding the behavior of skilled and unskilled real wages in the United States, especially those since 1980. Generalizing the Stopler–Samuelson theorem, the authors show that the nontraded sector is critical to explaining the effects of changes in the price of traded goods on relative and absolute wages. Factor-intensities play their role as in the traditional Stolper–Samuelson model, but the output of the nontraded sector matters as well. Specifically, freer trade benefits capital and hurts both the skilled and unskilled labor if the import as well as the nontraded sectors contract. This is a new result to the literature on Stolper–Samuelson issues.

This paper modifies the simple classical model by introducing capacity utilization that varies across the course of the business cycle. By making the capacity usage a choice variable that turns out to be sensitive to changes in the price level, we show that the classical model loses its fundamental feature, namely the neutrality of money. In our generalized framework, a rise in money supply improves upon all the real variables if the economy suffers from excess capacity, as in recessions and depressions. We demonstrate that our model describes the various economic cross-currents during the Great Depression extremely well. Thus, monetary policy emerges with an activist role even in a generally classical setting.

Economists universally regard tariffs to be inflationary and free trade to be deflationary, a view that this paper challenges. It is argued that while rotectionism has generally created inflation in developing economies, the experience of the United States was totally different. Tariffs in the US were never associated with rising prices, and trade liberalization with declining prices. High tariffs were always followed by sharp drops in the cost of living. A theoretical model is developed to explain the deflationary effects of tariffs in the United States. Thus tariffs produce inflation only in nonmarket or ualistic developing economies, but not in advanced economies.

In this paper we develop a simple general equilibrium model of trade to analyze the impact of tariffs and technical progress on the equilibrium rate of unemployment. We demonstrate that if a country imposes a tariff its equilibrium rate of unemployment is likely to rise, whereas the impact of technology on equilibrium unemployment depends on the labor intensity of the two sectors.

When the world shifted to the regime of flexible exchange rates after 1970, economists expected that large trade imbalances would soon disappear. Instead, such imbalances not only persisted but soared in the 1980s and 1990s, in spite of significant changes in important currencies such as the yen, the mark and the dollar. This paper reports that manufacturing importers tend to suffer trade deficits whereas exporters of manufacturing products tend to enjoy trade surpluses. The reason lies in the higher rates of productivity growth experienced by exporters of manufactures.

In the last ten years, a number of economists have tried to explain the observed decline or stagnation in the real wages of the US labor force in spite of slow but steady rise in labor productivity. This paper reports a similar affliction for the Japanese labor market since 1973. The explanation for stagnant wages in spite of respectable productivity gains in Japan lies in the vast appreciation of the yen versus the dollar, and ultimately in the highly regulated retail distribution.

This paper argues that not a single proposition of the modern theory of free trade is upheld by the recent experience of the United States. Freer trade is supposed to raise GNP growth and productivity growth as well as the living standard. Until 1972, when the US was practically a closed economy with a trade/GNP ratio averaging a low of 12%, GNP growth was 3.8%, productivity growth was 2%, and real wages had been rising for 150 years. Since 1972, the trade/GNP ratio has been rising steadily, US GNP growth has been only 2.5%, productivity growth is below 1%, and real wages have been falling for over three-quarters of the labor force.

This paper develops a two-sector general equilibrium model to examine the impact of technical progress, factor accumulation, labor growth, unemployment, trade policy, and the government's antipoverty programs on the rate of poverty. the results are then tested empirically using the data regarding the United States. We find that low unemployment, productivity growth, and government transfers have the expected effects of alleviating poverty; but trade liberalization has the unexpected effect of being associated with a major increase in poverty-a result contradicting traditional views.

The purpose of this paper is to explode the myth of free trade. Productivity and real wages in the United States rose sharply between 1950 and 1972, but since then real earnings have been falling in spite of a continuous rise in productivity. It turns out that America was more or less a closed economy until 1972, as its trade/GNP ratio was close to 10%; but since then it has become an open economy. the theoretical model shows how real wages may fall in an open economy, but not in a closed economy, in spite of rising productivity.

Currency depreciation has been studied conventionally in terms of three hypotheses—the elasticities approach, the monetary approach and the absorption approach. In this paper we offer another hypothesis called the price approach, wherein the balance of payment disequilibrium results from an inappropriate price level. Specifically, a country has a trade surplus if the equilibrium price level is below that compatible with balanced trade; by contrast, it has a trade deficit if the price level is above that compatible with balanced trade. We illustrate the price approach with the experience of currency devaluations that have occurred in emerging markets since 1997.