1. Middle Products Revisited

Kalyan Sanyal was a great student in the Ph.D. program at the University of Rochester in the early 1980s. He was interested in the general phenomenon of international trade in intermediate commodities. At an early stage we had many discussions about where trade should be positioned in the productive spectrum, and our answer was: “In the middle” – some production takes place before trade and some afterwards, hence the “middle products” designation. In this paper I review the major points in our earlier work, and place it in position with what could be considered its pre-cursors and then how, in the past 30 years, economists have taken more seriously the importance of trade in “middle products”, both in terms of new theory about fragmentation and outsourcing and in the mounting evidence that trade in parts and components have shown the most rapid rates of growth. Sanyal’s other work continued this investigation, often with an early use of the “continuum” concept, which has received wide use in more recent research.