European companies have invested heavily in manufacturing technologies in order to create or preserve their comparative advantage in the production of such things as turbines (Nelson Schwartz, “In a Recession, Europe’s Focus on Saving Jobs Pays Off.” New York Times, February 4, 2010, p. B1). In contrast, U.S. companies have exploited the comparative advantage of foreign production by closing older, uncompetitive manufacturing plants located in the United States in favor of newer plants located abroad and outsourcing jobs to countries with lower labor costs. Discuss the relative merits of the European versus United States approach to global competition in terms of maximizing the country’s well-being:

a) in the short run.

b) in the long run.