What do trade economists mean by "fragmentation" and how does fragmentation relate to "global value chains"?

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The Answer is Trade economists use the term "fragmentation" to describe the process of breaking down the production of goods and services into smaller tasks or stages that can be spread across different countries. This can involve different stages of production, such as design, manufacturing, assembly, and distribution, being carried out in different locations around the world.

Fragmentation is closely related to the concept of "global value chains" (GVCs), which refers to the international dispersion of production activities across different countries. In a global value chain, different stages of production are often carried out in different countries, with intermediate goods and services being traded across borders multiple times before a final product is completed.

The concept of fragmentation is important in understanding how modern international trade operates. It highlights the interconnectedness of different economies and the extent to which countries rely on each other for the production of goods and services. It also emphasizes the role of services, such as transportation, logistics, and information and communication technology, in facilitating the smooth operation of global value chains.

Overall, fragmentation and global value chains are key concepts in trade economics that highlight the complex and interdependent nature of international trade and production processes in the modern global economy.

What Do Trade Economists Mean by "Fragmentation" and How Does