The Changing Face of World Trade

The flows of world trade are changing: In the early 1990s, most merchandise was traded between advanced economies (AE). Nowadays, most goods are traded between AEs and so-called emerging markets and developing economies (EMDE). The main reason for this shift is the outsourcing of production from industrialized countries to countries where labor costs are lower. While this keeps inflation in check in the (post-) industrialized countries, it also costs many un- and semi-skilled jobs there, e.g. on the assembly lines.