Significant medium frequency fluctuations in output growth have characterized the performance of several industrialized countries over the postwar period. The U.S. economy, undoubtedly the technological leader of the time, experienced very high output growth during the 1960s, a substantial slowdown in growth rates in the 1970s through to the early 1980s, and a return to high growth for much of the remaining period until the recession that started in late 2007 produced a large deterioration in growth figures. Spain, a clear technological laggard in 1950 and an economy subsequently shaped by the forces of catch up and convergence, experienced a similar pattern of growth, but different timing, as downward swings in economic activity tended to appear once the U.S. economy had deteriorated.
Despite its importance for the analysis of life-cycle behavior and, in particular, retirement planning, stock ownership by private households is poorly understood. For instance, in contrast to the predictions of standard models of life-cycle behavior and portfolio choice, relatively few households hold stocks while those who do hold stocks often trade too often and too much.
The fear that offshoring may destroy large numbers of jobs in developed economies is widespread in the public mind. Blinder (2006) and others have suggested that this fear arises because firms are now able to trade not just physical inputs, but also service inputs which were previously regarded as non-tradeable. Many of these services, such as research and development, customer services or IT support are also skill-intensive, suggesting that offshoring may affect workers previously regarded as insulated from international competition.
However, despite the strong policy interest, our academic understanding of trade in services is very limited, especially compared to the theoretical and empirical advances which have been made in relation to the trade in goods. This is at least partly due to the paucity of detailed and high quality data on trade in services. Amiti and Wei (2005b, 2006) and Crin`o (2008) provide the only previous studies to have explicitly looked at the role of service offshoring for employment, but they use industry-level measures of offshoring.
