2006 News Releases

For immediate release: February 27, 2006

Dallas Fed’s Economic Letter Examines Benefits of Offshore Outsourcing

DALLAS—In the long run, offshore outsourcing results in overall economic gains, such as lower consumer prices, better products and higher productivity growth, according to the latest issue of the Federal Reserve Bank of Dallas’ Economic Letter.

In “Beyond the Outsourcing Angst: Making America More Productive,” Dallas Fed senior economist Thomas F. Siems writes that although offshore outsourcing can negatively impact jobs and wages for some workers, it is better for the economy to accept the challenge of competition.

Siems asserts that protectionist legislation could increase domestic prices and stifle innovation.

“Indeed, the secret to faster growth and greater prosperity lies in allowing individuals and businesses to do what they do best—and outsource the rest,” he says.

Globalization doesn’t just mean increased competition; it opens opportunities for cooperation, according to Siems. Through global outsourcing, companies become more dynamic.

The February 2006 issue of Economic Letter can be found at www.dallasfed.org.


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