Economics of Trade Wars and Wage Inequality

The book suggests that international trade and outsourcing helps developed countries to increase output of their products and reach global markets in cost effective ways as in case of US technology firm Apple when compared to its Asian competitor Samsung. In other words, international trade helps firms to produce higher output at lower prices. In contrast, in case of a trade war the consumers are faced with higher prices and lower output even if domestic and international demand of the technology product is elastic. The discussion also maps the methods for SMEs in Pakistan to evolve out of its usual mandate for community development into such a business making process whereby idea innovation and virtual technologies can enable SMEs to reach out to regional and national client base in addition to a local one. The book discusses the facilitation of enabling environment to the Pakistani entrepreneur by steps that may go beyond favorable regulation for a particular sector but may include increased involvement of financial subsidiaries to give bank guarantees and easy credit for new business development and value co creation in projects like Special Industrial Zones under CPEC.