Friday , February 26 2021
Home / Tag Archives: International Trade

Tag Archives: International Trade

Free trade and free labor markets

This caught my eye: [Arindrajit] Dube responds that “one has to be honest about not knowing what would be the impact in every place.” But he points to 2019 research by Anna Godoey and Michael Reich of the University of California at Berkeley, who found that increases in state minimums didn’t hurt employment even in low-wage counties where the new floor equaled 82% of the prevailing median wage. And even if a high minimum wage does kill some jobs—as many studies,...

Read More »

China won the trade war

A year ago, Tyler Cowen claimed that President Trump won round one of the trade war with China: I’m not entirely convinced we won even the first round of the trade war, although the claim might be true.  The stated goal of President Trump and his advisers was to reduce the US trade deficit with China.  A secondary goal may have been to slow the growth of China’s economy.  A third goal might have been to weaken the position of Xi Jinping, who has been moving China in...

Read More »

Eric Hoffer on “Property Rights” in Jobs

I’ve written before about how “The Box,” that is, containerization, slashed the cost of international trade, thus leading to more of it. My guess is that that reduction in cost was the equivalent of dropping tariffs by at least 5 percentage points. I quoted the famous statement by Paul Krugman that put it nicely: The ability to ship things long distances fairly cheaply has been there since the steamship and the railroad. What was the big bottleneck was getting things...

Read More »

U.S. Tariffs Are Not “More Punishing to China”

The world would be a different place, more rational and convivial, if all politicians, journalists, and editors had some clear notions of supply and demand as well as of the history of economic thought—if, for example, they had read David Hume, Adam Smith, Jean-Baptiste Say, James Mill, and John Stuart Mill. As an illustration, consider a sentence in yesterday’s Wall Street Journal (“Trump’s Trade War Will Be Left for Biden to Win,” January 3, 2021—my emphasis): [Mr....

Read More »

Time, Technology, and Textiles

A Review of The Fabric of Civilization: How Textiles Made the World, by Virginia Postrel, Basic Books, 2020 In 1998, Virginia Postrel closed her now classic book The Future and its Enemies with the observation that “We live in an enchanted world, a world suffused with intelligence, a world of our making. In such plenitude, too, lies an adventurous future.” Though I suppose some might see her books written since then–The Substance of Style and The Power of Glamour—as...

Read More »

Is progressivism a scam?

Terms like “progressive” can be defined in a variety of ways. One common theme is that progressives are relatively optimistic that governments can solve economic problems. We normally think of conservative Republicans as being on the other end of the spectrum, opposed to government meddling in the economy. President Trump is a bit unusual in that he is a Republican who is skeptical of the free market. He used a combination of subsidies, bullying and tariffs to try to...

Read More »

Imports as a “Drag on the Economy”

A Wall Street Journal story of last week, “The Verdict on Trump’s Economic Stewardship, Before Covid and After,” makes many good points. It also falls into some popular economic errors. Here is an obvious one: Trade itself turned out to be a drag on the economy. U.S. export growth slowed starting in 2018 as Mr. Trump’s tariff battles ramped up. The U.S. trade deficit, reflecting an excess of imports over exports, grew to $577 billion in 2019 from $481 billion in...

Read More »

Casey Mulligan’s Excellent Adventure

A sharply dressed bearded man stood up near the door of the White House meeting room and bellowed, “HHS, you need to hear the OMB loud and clear: your AKS RIA is DOA!” and exited the meeting. As several others filed out of the room behind him, I leaned toward CEA’s General Counsel Joel Zinberg and whispered, “That must be a world record for number of acronyms in one sentence. What the hell does it mean?” Joel chuckled and said, “I have no idea, except that we’re...

Read More »

Trade deficit whack-a-mole

In recent years, the US government has imposed tariffs on a number of nations, notably China. The administration argued that these policies would reduce our trade deficit. Many economists pointed out that the trade balance is basically domestic saving minus domestic investment, and that our highly expansionary fiscal policy would actually make the trade deficit larger. (Budget deficits tend to reduce domestic saving.) And this is exactly what seems to have happened...

Read More »

Three Economists Walk Into a Discussion, Part 2

Last week I posted Part 1 of my observations on the discussion between Kevin Hassett and Austan Goolsbee. This is Part 2. I left with the issue of the federal deficit and debt. 35:30: Goolsbee doesn’t think we’ll be Greece. We have low income tax rates, no VAT, and better demographics. He argues that tax rates on grandkids will need to he higher. He thinks we need immigration to offset the aging of the population. DRH comment: I’m disappointed that neither Hassett...

Read More »