Globalization: Some Fairly-Recent Must- and Should-Reads
In my view, successful economic communication of facts in a useful way starts with an anecdote—about, say, Cosette—which is then followed by "Cosette's experiences are typical", and then the numbers. But that is not how we economists talk. So even the best of us do not... get the mindshare that our ideas and our expertise deserve: Stefanie Stantcheva: The Fog of Immigration: "Surveyed 22,500 native-born respondents from France, Germany, Italy, Sweden, the UK, and the US. We concluded that much of the political debate about immigration takes place in a world of misinformation...
Doug Irwin: Trump’s Trade Policy Is An Exercise In Futility: "Yet for all the Sturm und Drang of his trade policy, the president is likely to end up being terribly disappointed by the results of his efforts...
It is also possible that harmonization, labor standards, investment measures, investor-state dispute settlement procedures, etc. will not empower but rather disempower "a different set of rent-seeking interests and politically well-connected firms". Certainly putting the US in the same basket as the EU as far as food health and safety is concerned would strengthen the left's hand inside the United States—and the Naderites frothing denunciations of the Codex Alimentarius were in bad faith. Rodrik's presumption that regulatory barriers are produced by good social democracy rather than bad rent-seeking has always seemed to me highly questionable: Dani Rodrik: What Do Trade Agreements Really Do?: "New (and often problematic) beyond-the-border features of current trade agreements... regulatory rules and harmonization...
Dan Drezner: Robert Gilpin, R.I.P.: "I never met Gilpin in person—in contrast to many colleagues, once he retired, he left the field for good. It’s my loss. I became enamored with his ideas while in graduate school... an excellent intellectual history of how realists thought about the politics of the world economy...
Brad Setser: Can Anyone Other than the U.S. Fund a Current Account Deficit These Days?: "To exaggerate a bit, the world may soon only have one borrower...
Barry Eichengreen and Poonam Gupta (2016): Managing Sudden Stops: "The recent reversal of capital flows to emerging markets has pointed up the continuing relevance of the sudden stop problem...
David Pilling: African economy: the limits of ‘leapfrogging’: "The rapid spread of technology has raised hopes for Africa, but digital services cannot take the place of good governance...
An interesting paper saying that Glick and Rose's findings are not robust. I am generally pro-customs unions. I was taught when I was knee-high to a grasshopper that the Zollverein was a big deal. And I have always been impressed by the scale of cross-state trade in the U.S., which dwarfs cross-nation trade within Europe. But I may have to rethink—and I believe I certainly have to revise up my beliefs about how precisely these effects can be estimated: Douglas L. Campbell and Aleksandr Chentsov: Breaking Badly: The Currency Union Effect on Trade: "A key policy question is how much currency unions (CUs) affect trade...
Santiago Levy Algazi: Under-Rewarded Efforts: The Elusive Quest for Prosperity in Mexico: "Why has an economy that has done so many things right failed to grow fast?...
Encyclopedia of Chicago (1899): Mr. Dooley Explains Our "Common Hurtage": "In the late 1890s, Finley Peter Dunne's newspaper columns in Irish dialect brought to life a fictional Bridgeport bartender, Mr. Dooley...
Assessing the "China Shock": I enter into a conversation between Noah nd Larry to give my views:...
Caroline Roullier, Laure Benoit, Doyle B. McKey, and Vincent Lebot: Historical collections reveal patterns of diffusion of sweet potato in Oceania obscured by modern plant movements and recombination: "The history of sweet potato in the Pacific has long been an enigma...
Alberto Alesina, Armando Miano, and Stefanie Stantcheva: Misperceptions about Immigration and Support for Redistribution: "The debate on immigration is often based on misperceptions about the number and character of immigrants...
How, again, is Donald Trump supposed to win a breath-holding contest with an authoritarian régime that both controls its media and sees little downside in redirecting resources to cushion the impact on potentially noisy losers?: Paul Krugman: How to Lose a Trade War: "Trump’s declaration that 'trade wars are good, and easy to win' is an instant classic, right up there with Herbert Hoover’s 'prosperity is just around the corner'
But are we sure that our debts are in dollars? Would we know it if the big New York banks had been trying to boost their earnings by selling unhedged dollar puts, in the (probably correct) belief that if they all do this together they do not have a problem, the rest of us have a problem?: Paul Krugman: Opinion | Partying Like It’s 1998 - The New York Times: "Those of us who devoted a lot of time to understanding the Asian financial crisis two decades ago were wondering whether Turkey was going to stage a re-enactment. Sure enough...
Marti Sandbu: EuroTragedy: A Drama in Nine Acts, by Ashoka Mody: "Writing about the euro... doing justice to the technicalities threatens to kill any narrative, while simplified storytelling risks misguided analysis. Ashoka Mody’s... is an ambitious attempt to avoid this trap...
We really do not know what effect a trade war would have on the global economy. All of our baselines are based off of what has happened in the past, long before the age of highly integrated global value chains. It could be small. It could be big. The real forecast is: we just do not yet know: Dan McCrum: Trade tension and China : "The war on trade started by the Trump administration is percolating through the world's analytical apparatus.... Tariffs could be bad for the global pace of economic activity, but only if the economic warfare escalates...
It has always seemed to me that the sharp Josh Bivens is engaging in some motivated reasoning here: "[1] Putting pen-to-paper on trade agreements contributed nothing to aggregate job loss in American manufacturing. This is almost certainly true.... [2] The trade agreements we have signed are mostly good policy and have had only very modest regressive downsides for American workers. This is false." How am I supposed to reconcile [1] and [2] here?: Josh Bivens (2017): Brad DeLong is far too lenient on trade policy’s role in generating economic distress for American workers on Brad DeLong (2017): NAFTA and other trade deals have not gutted American manufacturing—period: "I could rant with the best of them about our failure to be a capital-exporting nation financing the industrialization of the world...
Early industrial Japan did marvelous things. It accomplished something unique: transferring enough industrial technology outside of the charmed circles of the North Atlantic and the temperate-climate European settler economies. Ever since, politicians, economists, and pretty much everybody else have been trying to determine just what it was Japan was ale to do, and why. But it was a low-wage semi-industrial civilization, economizing on land, materials, and capital and sweating labor: Pietra Rivoli (2005): The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade (New York: John Riley: 0470456426) https://books.google.com/books?isbn=0470456426: "Female cotton workers in prewar Japan were referred to as 'birds in a cage'...
Edith Laget, Alberto Osnago, Nadia Rocha, and Michele Ruta: Trade agreements and global production: "Deeper agreements have boosted countries’ participation in global value chains and helped them integrate in industries with higher levels of value added. Investment and competition now drive global value chain participation in North-South relationships, while removing traditional barriers remains important for South-South relationships...
Wealth inequality measures have been grossly understating concentration because of tax evasion and tax avoidance in tax havens: Annette Alstadsæter, Niels Johannesen, and GabrielZucman: Who owns the wealth in tax havens? Macro evidence and implications for global inequality: "This paper estimates the amount of household wealth owned by each country in offshore tax havens...
Jared Bernstein: [Trump did a bunch of stuff to strengthen the dollar; now he’s upset about the strengthening dollar(https://www.washingtonpost.com/news/posteverything/wp/2018/07/20/trump-did-a-bunch-of-stuff-to-strengthen-the-dollar-nows-hes-upset-about-the-strengthening-dollar/?noredirect=on&utmterm=.576fbc1e4803)_: "Trump is annoyed that the Fed is raising rates and that the stronger dollar is making our exports less competitive...
Paul Krugman: Brexit Meets Gravity: "These days I’m writing a lot about trade policy. I know there are more crucial topics, like Alan Dershowitz. Maybe a few other things? But getting and spending go on; and to be honest, in a way I’m doing trade issues as a form of therapy and/or escapism, focusing on stuff I know as a break from the grim political news...
A Britain led by Theresa May or Boris Johnson or Jeremy Corbin will not "rediscover its own way... the British rae most resilient, most inventive, and happiest when they feel in control of their own future". That is simply wrong. And if it were right, May and Johnson and Corbin are not Churchill or Lloyd-George or even Salisbury: Robert Skidelsky: The British History of Brexit: "I am unpersuaded by the Remain argument that leaving the EU would be economically catastrophic for Britain...
Paul Krugman: "Maybe it's worth laying out the incoherence of Trump's trade war a bit more, um, coherently...
IMHO, betting that "even the Tory Party can spot a wrong 'un" seems a lot like drawing to an inside straight: Dan Davies: "The hard brexit types have been bounced into deal which has taught them that they're not as clever as they thought they were. Now they'll react to that with a leadership challenge which will teach them that they're not as popular as they thought they were. It's like education in the Montessori system-each little independence of discovery builds on the next..."
Anne Applebaum: Brexit is reaching its grim moment of truth—and the Brexiteers know it: "David Davis... and Boris Johnson.... At no point... have they or any of their Brexiteer colleagues offered what might be described as a viable alternative plan. That is because there isn’t one...
Trade around the Indian Ocean before 1500 was a largely peaceful, stable process. Empires, kingdoms, sultanates, and emirates ruled the lands around the ocean, but they did not have the naval strength or the orientation to even think of trying to control the ocean's trade. Pirates were pirates—but only attacked weak targets, and needed bases, and for the land-based kingdoms providing bases for pirates disrupted their own trade. Then came 1500, and a new entity appeared in the Indian Ocean: the Portuguese seaborne empire: [Non-Market Actors in a Market Economy: A Historical Parable): From David Abernethy (2000), The Dynamics of Global Dominance: European Overseas Empires 1415-1980 (New Haven: Yale), p. 242 ff: "Malacca... located on the Malayan side of the narrow strait... the principal center for maritime trade among Indian Ocean emporia, the Spice Islands, and China...
Alex Barker and Peter Campbell: Honda faces the real cost of Brexit in a former Spitfire plant: "Honda operates two cavernous warehouses.... They still only store enough kit to keep production of the Honda Civic rolling for 36 hours...
The big problem China will face in a decade is this: an aging near-absolute monarch who does not dare dismount is itself a huge source of instability. The problem is worse than the standard historical pattern that imperial succession has never delivered more than five good emperors in a row. The problem is the again of a formerly good emperor. Before modern medicine one could hope that the time of chaos between when the grip on the reins of the old emperor loosened and the grip of the new emperor tightened would be short. But in the age of modern medicine that is certainly not the way to bet. Thus monarchy looks no more attractive than demagoguery today. We can help to build or restore or remember our “republican remedy for the diseases most incident to republican government“. An autocracy faced with the succession and the dotage problems does not have this option. Once they abandon collective aristocratic leadership in order to manage the succession problem, I see little possibility of a solution. And this brings me to Martin Wolf. China's current trajectory is not designed to generate durable political stability: Martin Wolf: How the west should judge the claimsof a rising China: “Chinese political stability is fragile...
Brad Setser: "Larry Summers on Trump and trade:: 'From tweet to tweet, official to official, nobody can tell what his priorities are.' Certainly rings true to me. I have almost stopped trying to guess. Even for China
Ken Schultz: "I’m not an IPE expert, but it seems like you must be doing tariffs wrong if they aren’t even supported by the labor union in the protected industry..."
* Paul Krugman: Oh, What a Stupid Trade War: "Even if tariffs were expansionary, that would just make the Fed raise rates faster, which would in turn crowd out jobs in other industries...Gabrielle Coppola: Trump’s TPP Pullout May Have Cost Missouri Its Harley Factory: "Harley-Davidson Inc.’s chief executive officer said he may have kept a plant open in Missouri if the U.S. had stayed in the Trans-Pacific Partnership, the free-trade agreement that President Donald Trump withdrew from last year...
The Brexiters never had a plan for what they would do if they won the referendum. And they still do not have a plan. I do not see a road other than "transitional" arrangements that keep things as they are without the UK having any voice in Brussels—"transitional" arrangements that will keep getting indefinitely extended: Robert Hutton: Stuck In the Middle: These Are Theresa May's Four Brexit Options: "Her inner Brexit Cabinet has rejected her proposed customs relationship with the European Union...
Some very interesting thoughts from Ken Rogoff. But he does not seem to recognize that Shenzhen is now at least as much a global hub of hardware and manufacturing process innovation in small-scale high-tech devices as anywhere else in the world. World class communities of engineering practice are hard to build. But China looks to be building one. I would dearly love somebody to take a deep close look at Shenzhen and tell me to what extent it is already more than just "the great assembler": Ken Rogoff: Will China Really Supplant US Economic Hegemony?: "Over the next 100 years, who takes over, Chinese workers or the robots?...
If the U.S. wants to avoid a very damaging outcome to all this, the less immoderate Republicans and the Democrats need to be thinking hard about how to take power away from Donald Trump on trade matters—and national security matters—come January 5, 2019: Martin Wolf: Donald Trump declares trade war on China: "The Trump administration has presented China with an ultimatum on trade...
National Taxpayers Union: More Than 1,100 Economists Join NTU to Voice Opposition to Tariffs, Protectionism: "The lowering of trade barriers between nations has been one of the great achievements of the global economic system in the postwar era...
Eight years of Governor Sam Brownback has seen Kansas lose 8% of its jobs relative to the national average. Now Kansas is Ground Zero for Trump's trade war. Joshua Green: Chinese Sorghum Tariffs Will Hit Hard in Trump-friendly Kansas: "Trump’s Trade War Hits Another Red State: What’s the matter with Kansas? It’ll be hardest hit by new Chinese tariffs...
Alessandro Nicita, Marcelo Olarreaga, and Peri da Silva: [A trade war will increase average tariffs by 32 percentage points(https://voxeu.org/article/trade-war-will-increase-average-tariffs-32-percentage-points): "A trade war will increase average tariffs by 32 percentage points...
"If getting China to pay what it owes for technology were the goal, you’d expect the U.S.... to make specific demands... and... build a coalition", a Tran-Pacific Partnership, so to speak: Paul Krugman: The Art of the Flail: "Whenever investors suspect that Donald Trump will really go through with his threats of big tariff increases... stocks plunge...
Imposing tariffs on intermediate inputs is especially bad, especially destructive: Chad Brown: The Element of Surprise Is a Bad Strategy for a Trade War: "Trump’s decision to impose restrictions on intermediate inputs and capital equipment is a step backward...
@#$#@!*&%%!! Ana Swanson: Trump Proposes Rejoining Trans-Pacific Partnership to Shield Farmers From Trade War: "President Trump... [said] he was directing his advisers to look into rejoining the multicountry trade deal known as the Trans-Pacific Partnership...
Jesse K. Anttila-Hughes et al.: Mortality from Nestlé's Marketing of Infant Formula in Low and Middle-Income Countries: "Intensive and controversial marketing of infant formula is believed to be responsible for millions of infant deaths in low and middle-income countries (LMICs)...
Paul Krugman: Trade Wars, Stranded Assets, and the Stock Market: "Even a trade war that drastically rolled back globalization wouldn’t impose costs on the economy comparable to the kinds of movement we’ve seen in stock prices...
Martin Wolf: The Chinese economy is rebalancing, at last: "Consumption is at last becoming the most important driver of demand in the Chinese economy...
Martin Wolf: How China can avoid a trade war with the US: "The objectives of these US actions are unclear... to halt alleged misbehaviour... or, as the labelling of China as a “strategic competitor” suggests, is it to halt China’s technological progress altogether—an aim that is unachievable and certainly non-negotiable...
Paul Krugman: Globalization: What Did We Miss?: "Anyone who worked on the political economy of trade policy knew that fights over tariffs look very much as if they come out of a specific-factors world...
Robert Feenstra, Hong Ma, Akira Sasahara, and Yuan Xu: Reconsidering the ‘China shock’ in trade: "While previous studies focus on the job-reducing effect of the surging imports from China or other low-wage countries on US employment...
Highlighted: Globalization: What Did Paul Krugman Miss?
Shawn Donnan: Trump is about to launch a trade war with no way out: "Business chiefs have pleaded for the Trump administration not to impose tariffs on electronics, shoes and other imports from China that go far beyond the steel and aluminium he has already targeted...
Lant Pritchett: Alleviating Global Poverty: Labor Mobility, Direct Assistance, and Economic Growth
Wakanda and the Resource Curse: "Wakanda’s prosperity is based on its possession of vibranium, a stable transuranic elements with unique and extraordinary chemical properties..."
J. Vernon Henderson, Adam Storeygard, Tim L. Squires, and David N. Weil: The Global Spatial Distribution of Economic Activity: Nature, History, and the Role of Trade: "We study the distribution of economic activity, as proxied by lights at night, across 250,000 grid cells of average area 560 square kilometers...
Martin Feldstein: The Real Reason for Trump’s Steel and Aluminum Tariffs: "The US tariffs will... increase the likelihood that China will accelerate the reduction in subsidized excess capacity...
Ernest Liu (2016): INDUSTRIAL POLICIES IN PRODUCTION NETWORKS: "Many developing countries adopt industrial policies that push resources towards selected economic sectors...
Dani Rodrik: Trump’s Trade Gimmickry: "The imbalances and inequities generated by the global economy cannot be tackled by protecting a few politically well-connected industries, using manifestly ridiculous national security considerations as an excuse...
Paul Krugman: "This might be a good time to talk about the arithmetic of trade and manufacturing... why even a full-on trade war can't restore the manufacturing-centered economy Trump wants back...
Vachel Lindsay: The Congo: A Study of the Negro Race "Listen to the yell of Leopold's ghost...
Simon Wren-Lewis: Labour's embrace of a customs union could end the Brexit fantasy: "The UK was always going to stay in a customs union with the EU the moment that the EU put the Irish border as one of the three items to be settled at the first stage..
Zachary Torrey: TPP 2.0: The Deal Without the US: "What’s new about the CPTPP and what do the changes mean?...
Bishnupriya Gupta: Falling Behind and Catching up: India’s Transition from a Colonial Economy: "India fell behind during colonial rule...
Dani Rodrik: What Does a True Populism Look Like? It Looks Like the New Deal: "When populism succeeds, it does so not by cosmetic gimmicks but by going after the roots of economic injustice directly...
Daniel Thomas: London life proves hard to give up for Brexit relocations: "Brexit.... Some of the most important conversations were... but in the kitchens and living rooms of those learning their fates in the first wave of company relocations...
Doug Campbell: Relative Prices, Hysteresis, and the Decline of American Manufacturing: "This study uses new measures of real exchange rates to study the collapse of US manufacturing employment in the early 2000s in historical and international perspective...
Martin Wolf: Brexit has replaced the UK’s stiff upper lip with quivering rage: "In part, the UK is victim of its past successes...
Oleg Itskhoki and Dmitry Mukhin: Exchange Rate Disconnect in General Eqilibrium: "We propose a dynamic general equilibrium model of exchange rate determination...
Susan Houseman: Understanding the [Post-2000] Decline in Manufacturing Employment: "How did so many people erroneously point to automation as the culprit? It was, Houseman said...
Jeffrey Frankel: Does Trade Fuel Inequality?
