I suspect that the average American assumes that low wage countries have a competitive advantage in international trade. Economists often rebut that argument using Ricardian trade theory. But the public cares little for “theory”, and remains unconvinced. So what about the real world?
There are many ways of looking at this question, but I suspect that many people are especially worried about the trade deficit. So let’s consider the question of whether low wages tend to lead to current account surpluses.