Domestic Growth and the World Economy

However, this merely statistical interpretation is somewhat reductionist. The world economy is not only the arithmetic sum total of national economies, it is also the product of the interaction of those economies. In particular, nations engage in trade with one another. Their patterns of trade reflect a host of economic specializations, just as any local economy comprises a host of exchanges of specialized goods and services.

Thus, one nation may have a competitive advantage in agricultural products, another in heavy industrial goods, and yet another in financial services. The patterns of trade, at any given time, reflect these specializations and advantages, and tend to reinforce them. If you are carmaker to the world, continued investment in auto plants is a more natural course of action than investment in other products in which other economies have leadership.

However, the development of a national economy is rarely linear and proportional. As it grows, som

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e. Indeed, some major computer makers do not actually manufacture anything; they assemble a combination of subsystems, often according to a customer's particular desires, with the range of "options" limited mainly by customers' ability to determine what they want amid a bewildering range of possibilities. Most of the work done in producing these goods goes into developing and refining the design. If assembly-line work simplified most tasks as compared to the traditional workshop, high-tech design does the opposite. The work of a computer programmer cannot be timed by a stopwatch. Programming remains largely an art, and programmer productivity remarkably hard to measure. "Lines of code per hour" is a nearly useless measure, since a particular skilled programmer may find a way to perform a task with fewer lines of code (and, probably, the code will run faster and more reliably). The military-style organization that performed so well in high-volume production is quite unsuited to this type of high-value production. Hierarchical lines of authority on an organizational chart are not helpful, when crucial innovations may come unexpectedly out of any working group. The structure of a company making these high-value product
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Approximate Word count = 5061
Approximate Pages = 20 (250 words per page)

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