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AEI on Merchandise Trade Deficits

Summary:
I follow Perry on Twitter and saw this: So, standard disclaimers: Trump’s policies on trade are awful, and his framing of the issues when he speaks to the public is also terrible. His policies, other things equal, will make Americans poorer, and he conveys a very confused understanding of the topic. Having gotten that out of the way, I think there is a basic mistake in the above treatment of (merchandise) trade deficits and capital inflows (on the level of, I might have put it as a bonus question on an Econ 201 exam). Which is awkward if it occurs in the midst of mocking someone for not being intellectual on trade. (To be clear, I’m sure the economists at AEI are aware of the nuance I’m referring to. My point is just, you probably shouldn’t make a basic

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I follow Perry on Twitter and saw this:

AEI on Merchandise Trade Deficits

So, standard disclaimers: Trump’s policies on trade are awful, and his framing of the issues when he speaks to the public is also terrible. His policies, other things equal, will make Americans poorer, and he conveys a very confused understanding of the topic.

Having gotten that out of the way, I think there is a basic mistake in the above treatment of (merchandise) trade deficits and capital inflows (on the level of, I might have put it as a bonus question on an Econ 201 exam). Which is awkward if it occurs in the midst of mocking someone for not being intellectual on trade.

(To be clear, I’m sure the economists at AEI are aware of the nuance I’m referring to. My point is just, you probably shouldn’t make a basic mistake in the midst of lecturing Trump on trade.)

I’m bogged down with day job stuff right now so I’ll see if any of you know what I mean…

Robert Murphy
Christian, Austrian economist, and libertarian theorist. Research Prof at Texas Tech and author of *Choice*. Paul Krugman's worst nightmare.

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