Bryan Caplan and David Henderson

International Trade

A Category Archive (207 entries)

Jeff Hummel's Case for Martin Van Buren over Tyler

Public Choice Theory
David Henderson
Last weekend, I posted about who should be on Mt. Rushmore. In the comments, there was discussion about who was the greatest American president. Ivan Eland, not a commenter but a friend who has written a book on the subject,... MORE

Richard McKenzie on Foreign Export Subsidies

International Trade
David Henderson
The subsidization of foreign exports enables Americans to tap into the income bases of foreign countries and impose a tax on foreigners every time a subsidized product is imported into this country. Communist China, for example, would never consider allowing... MORE

My 1984 CEA Memo on Alaskan Oil Exports

International Trade
David Henderson
Earlier this week, I posted a 1983 memo that I wrote to my boss at the Council of Economic Advisers, Martin Feldstein, about a meeting to discuss relaxing the limits on exports of Alaskan oil. Below is a follow-up memo... MORE

My 1983 CEA Memo on the Ban on Alaskan Oil Exports

International Trade
David Henderson
Last week, I posted here and here about Larry Summers's excellent talk in which he advocated removing the ban on U.S. oil exports. I then remembered that when I was the Senior Economist for Energy Policy with President Reagan's Council... MORE

Larry Summers on Oil Exports, Part II

Energy, Environment, Resources
David Henderson
Yesterday, I posted about Larry Summers's excellent speech making the case against government restrictions on exports of oil and natural gas. It was getting overly long and so this is Part II. I'll start by highlighting, and responding to, the... MORE

Larry Summers on Oil Exports, Part I

Energy, Environment, Resources
David Henderson
I believe that the question of whether the United States should have a substantially more permissive policy with respect to the export of crude oil and with respect to the export of natural gas is easy. The answer is affirmative.... MORE

The Brilliance Of The Onion on Immigrant Fruit

International Trade
Art Carden
" Original.... MORE

Should firms pay a premium for products that are "made in America"? The obvious answer is "yes" if consumers are willing to pay a premium for a "made in America" label, but the benefit to Americans isn't so clear. Last... MORE

Carlos Ball, RIP

Obituaries
David Henderson
Ian Vasquez of the Cato Institute reports: Venezuelan journalist and Cato adjunct scholar Carlos Ball passed away last week. He was 75. Carlos was a champion of liberty and a long-time friend to so many of us in the freedom... MORE

Good News on Australia's Economic Policies

International Trade
David Henderson
The Australian Parliament voted yesterday to end the government's tax on carbon. The reporting in the link is pretty good except for this statement: "Australia on Thursday became the first country in the world to abolish a price on carbon."... MORE

Who Caused the August 1990 Spike in Oil Prices?

Energy, Environment, Resources
David Henderson
Who caused the August 1990 spike in oil prices? If you learned that someone had reduced the supply of oil substantially just before the spike, wouldn't you think that that someone caused the price increase? You might think that I'm... MORE

Local politicians and protesters are in a huff about foreign producers "dumping" steel on the US market. They're making the usual noise about protecting communities, foreigners "flooding" American markets, and so on. If you're worried about losing your job because... MORE

Myth of the Rational Voter: The Animated Series, Part 4

Behavioral Economics and Rationality
Bryan Caplan
My Learn Liberty video on anti-foreign bias is now up.  It's the last of the series, probably the best, and certainly the most important.... MORE

Thoughts on Krikorian

Labor Mobility, Immigration, Outsourcing
David Henderson
In his recent debate on immigration with my co-blogger Bryan Caplan with my friend Alex Nowrasteh, Mark Krikorian makes two interesting points. The first is that the term "open borders" is not an accurate description of what many of us... MORE

Trade Creates Peace

International Trade
David Henderson
"Germany Vexed by Ties to Russia." So reads the headline of a front-page article in the Saturday/Sunday Wall Street Journal by Anton Troianovski. Mr. Troianovski goes on to point out the tension between German Chancellor Angela Merkel's desire to be... MORE

Adam Smith Bio Corrected

International Trade
David Henderson
It is a mistake to say that Adam Smith unambiguously favored retaliatory tariffs. Russ Roberts called my attention to a mistake in my bio of Adam Smith in The Concise Encyclopedia of Economics. I had bought the conventional wisdom on... MORE

Media Bias: RT May Have Less Than I Thought

Cross-country Comparisons
David Henderson
Like many Americans, I have been skeptical about RT, the TV network, previously called "Russia Today," that is funded by the Russian government. That didn't stop me from going on the network because I don't have a policy of going... MORE

If You're So Smart . . .

Labor Market
David Henderson
In a recent blog post, my friend Don Boudreaux writes: In short, monopsony power in labor markets keep workers underpaid. With all those underpaid workers out there--and because there are no government-enforced prohibitions on starting companies that employ low-skilled workers--a... MORE

The Relative Unimportance of Seigniorage

International Trade
David Henderson
I start every 50-minute segment of my class with a 5-minute discussion in which the students can ask about or talk about anything as long as it is economics. I've been doing it since January 1993 and it has been... MORE

Assad Pulls a Keystone

Energy, Environment, Resources
David Henderson
Why has the little nation of Qatar spent 3 billion dollars to support the rebels in Syria? Could it be because Qatar is the largest exporter of liquid natural gas in the world and Assad won't let them build a... MORE

I, Coffee

International Trade
David Henderson
For instance, even the relatively simple GVC [global value chain] of Starbuck's (United States), based on one service (the sale of coffee), requires the management of a value chain that spans all continents; directly employs 150,000 people; sources coffee from... MORE

When Goods Don't Cross Borders, Armies Will

International Trade
David Henderson
One quote that Bastiat lovers--I include myself--love to cite is Bastiat's famous quote, "When goods don't cross borders, armies will." There's one little problem with the quote: he never said it. He should have said it. One can imagine, with... MORE

Galbraith Opposes Cronyism

Books: Reviews and Suggested Readings
David Henderson
In John Kenneth Galbraith: His Life, His Politics, His Economics, Richard Parker writes: The following year [1951], at the invitation of Puerto Rico's reform-minded governor, Luis Munoz Marin, Galbraith and a small team of researchers paid repeated visits to the... MORE

I, Beef Jerky

Central Planning vs. Local Knowledge
Art Carden
Yesterday morning, I opened a bag of beef jerky that reads "MADE IN THE U.S.A." at the bottom of the front of the bag. On the back of the bag--and I found this interesting--one reads that the jerky Contains beef... MORE

Roughead on Sea Power

International Trade
David Henderson
In Monday's Wall Street Journal, Gary Roughead, former chief of naval operations and now a fellow at the Hoover Institution, has a review of Mayday: The Decline of American Naval Supremacy by Seth Cropsey, a former deputy undersecretary of the... MORE

Trading With Foreigners: What's In It For Us?

Cost-benefit Analysis
Art Carden
Arguments against international trade and immigration are classic examples of people ignoring Bastiat's lesson and focusing only on what is seen while ignoring what is unseen. What, people ask, is in it for *us* if we trade with foreigners? The... MORE

Feeling Good About Solar Panels

International Trade
Alberto Mingardi
War is the health of the state, said Randolph Bourne. What then about trade war? The European Union is imposing tariffs on solar panels imported from China, as Chinese manufacturers are accused of dumping and EU producers are "suffering badly",... MORE

Sanctions and Boycotts in an Interconnected World

International Trade
David Henderson
Hawking's decision to join the boycott of Israel is quite hypocritical for an individual who prides himself on his own intellectual accomplishment. His whole computer-based communication system runs on a chip designed by Israel's Intel team. I suggest that if... MORE

Speech: The Perverse Economics of Sanctions

Upcoming Events
David Henderson
Tonight I'll be speaking at the Monterey Institute of International Studies on the perverse economics of sanctions. The other speaker is Stephen Zunes. The overall event is on Iran. 7:30 PM at the Irvine Auditorium, Monterey Institute of International Studies... MORE

Was the Iraq War About Oil?

Energy, Environment, Resources
David Henderson
Reader warning: If you do not "do" nuance, then please don't read this post and especially don't comment. On this 10th anniversary of the U.S. government's invasion of Iraq, there have been many articles assessing the war. I wrote a... MORE

Krugman on Gains from Trade

International Trade
David Henderson
Paul Krugman has posted his slides for a lecture on gains from trade. They're excellent. One fun highlight on the last slide is a quote from my fellow Canuck, the late Harry Johnson: Second-best policies are usually recommended by third-best... MORE

Travels of a T-Shirt

Books: Reviews and Suggested Readings
David Henderson
In an e-mail, Jeff Hummel wrote a book review that's good enough to post. Here it is: Pietra Riovoli's THE TRAVELS OF A T-SHIRT IN THE GLOBAL ECONOMY: AN ECONOMIST EXAMINES THE MARKETS, POWER, AND POLITICS OF WORLD TRADE was... MORE

Henderson on Landsburg's "Armchair Economist"

Books: Reviews and Suggested Readings
David Henderson
Steven Landsburg's The Armchair Economist is one of the best economics books ever written. It is insightful, disarmingly simple and yet sophisticated and, at the same time, provocative, passionate, and witty. Were I to detail the many things I like... MORE

Conard on Trade and the Trade Deficit

International Trade
David Henderson
I'm working on a book review of Edward Conard's book, Unintended Consequences. I'm over half way through the book and, although there are a few cryptic passages, when he's good, he's very, very good. And he's often good. I hate... MORE

When I talk about my work for Mercatus on the post-World War II economic boom, one of the responses I often get is that a major reason is the fact that European economies were devastated and, therefore, the U.S. economy... MORE

Yglesias's Off-Target Critique of Caplan and Bastiat

International Trade
David Henderson
In a critique of both Bryan Caplan and Frederic Bastiat, Matt Yglesias badly misses his target. First, on Caplan, Yglesias writes: in a second and much worse post, he kind of posits a broad conspiracy theory as the reason. But... MORE

Evan Soltas on the Great Factor-Price Equalization

International Trade
Arnold Kling
He writes, The basic idea here is that the maintenance of Bretton Woods' fixed exchange rates required a system of financial controls which so severely limited capital flows, global investment and trade that economies were effectively closed. When Bretton Woods... MORE

Does Import Dependence Make Us More Vulnerable?

International Trade
David Henderson
An increasing reliance on imports, combined with the fraying of the nation's power grid, highways and rail lines, leaves the United States more vulnerable to the damage of natural disasters and terrorist attacks, according to a report to be released... MORE

Some Economics of Sanctions on Iran

International Trade
David Henderson
The experience with sanctions on Iran suggests some of the difficulties. In that case, the internal group likely to benefit most from sanctions is the Pasdaran, or Revolutionary Guards, which, coincidentally, may also prove to be the group most in... MORE

Does Peggy Noonan Understand Comparative Advantage?

International Trade
David Henderson
In the controversy surrounding the uniforms of the 2012 U.S. Olympic team, the problem isn't China. That the uniforms were made there is merely a deep embarrassment and a missed opportunity. Our textile and manufacturing companies deserved that work. You... MORE

August 1: Freedom for Western Canadian Wheat Farmers

International Trade
David Henderson
On August 1 this year, the Canadian government's monopsony over western Canadian wheat will end. For 68 years, farmers in western Canada have been able to sell their wheat legally only to one entity: the Canadian Wheat Board. But starting... MORE

Henderson on Robert Guest

International Trade
David Henderson
His basic argument is that migration of people across borders creates, in the United States particularly, not so much a melting pot as a "rich stew." (This is not a quote from the book; it's actually from Cato Institute senior... MORE

Adam Smith on U.S. Independence

International Trade
David Henderson
Here is what Adam Smith wrote in 1776 (in The Wealth of Nations) about the odds that the British government would voluntarily give up control over the 13 colonies. Notice his clear distinction between what he thought the British government... MORE

Changing World Trade Patterns

International Trade
Arnold Kling
From the latest issue of the Journal of Economic Perspectives, I recommend The Rise of Middle Kingdoms by Gordon H. Hanson. Whereas high-income economies accounted for four-fifths of global trade in 1985, they will account for less than half by... MORE

Marco Rubio: Trade Agreements Are About Producers

International Trade
David Henderson
One of the hardest ideas for non-economists to get is the idea that a government's unilateral elimination of trade barriers create a net benefit for the people in the country whose government makes the unilateral move. I pointed this out... MORE

Tear Down These Walls

Labor Market
David Henderson
My article, "Tear Down These Walls," based on my blog post of the same name, is now out in The Freeman. One highlight: Immigration reform would dwarf any other measure economists have considered to help people in poor countries. Take... MORE

Matt Zwolinski on Sweatshops

Labor Market
David Henderson
Was Schindler Wrong? Philosophy professor Matt Zwolinski has an excellent video on sweatshops at LearnLiberty.org. LearnLiberty.org has given me permission to put it here. I basically like the video, although I have one question and one disagreement. My question is... MORE

The Economics of Sanctions on Iraq

International Trade
David Henderson
However, the devastation of Iraq in the service of limiting proliferation did not begin with the war in 2003. For the previous 13 years, that country had suffered under economic sanctions, visited upon it by both Democratic and Republican administrations,... MORE

The Thai Economy

International Trade
David Henderson
Earlier this month, I returned from a 10-day trip to Thailand. Here are some impressions of the Thai economy: "street-level" impressions, not impressions based on looking at aggregate data. Also, I didn't make it to Bangkok, spending the whole time... MORE

Public Radio International, to its credit, after some digging into claims made against Apple by Mike Daisey, not only found that he told a number of lies but also retracted its previous coverage in which PRI had assumed that he... MORE

Retired U.S. Admiral: Iranians are Human Too

International Trade
David Henderson
Does Bob Schieffer Owe Ron Paul an Apology? ADM. FALLON: Yeah - just to add, if I could, to what General Cartwright said: I think it's really important that at the end of the day, these are people - 70,000,000... MORE

O'Reilly and Dobbs to Obama: Be More Socialist

Energy, Environment, Resources
David Henderson
I'm sitting in my hotel room in Chiang Mai, Thailand watching The O'Reilly Factor. I might as well have been watching Amy Goodman's Democracy Now! The content was almost indistinguishable. O'Reilly and Dobbs were saying that Obama should be taking... MORE

Is Iran a Threat?

Behavioral Economics and Rationality
David Henderson
But, say the critics, Iran is different. They have all those mad mullahs over there who don't care about life on earth and simply want to destroy -- fill in the blank -- Israel, the United States, or Israel and... MORE

My University of Rochester Talk

International Trade
David Henderson
On Thursday evening, Feb. 9, I'll be giving a public talk at the University of Rochester in Rochester, New York. It will go from 7:30 to 9:00, with ample time during that time period for Q&A. The talk is titled:... MORE

Adam Davidson Turns Mercantilist

International Trade
David Henderson
The currency intervention also functions as a massive inequality-creation machine. U.S.-based behemoths, which own or use many of those exporting Chinese factories, benefit, as do their shareholders. And because more than 90 percent of U. S. stocks are owned by... MORE

Mitt Romney on Mercantilism

International Trade
David Henderson
But they [the Chinese] sell us this much stuff [holding his hands far apart.] We sell them this much stuff [holding his hands close together.] Tell me, who doesn't want the trade war? They don't want it real bad. And... MORE

My "Occupy Monterey" Talk, Part III

International Trade
David Henderson
For Parts I and II, see here and here. "One big advantage of free markets," I said, "is that they make wars less likely. When there is a lot of trade between countries, both sides have more to lose by... MORE

Donald Trump: The Price is Wrong

International Trade
David Henderson
On The O'Reilly Factor last night, Bill O'Reilly asked Donald Trump for, in order of priority, which were the most important butts to kick. Number 1 for Trump was the Chinese government for keeping the value of China's currency artificially... MORE

Is Iran a Threat?

Upcoming Events
David Henderson
On Friday morning, I'll be speaking on the topic, "Is Iran a Threat?" at the campus of Cal State University, Monterey Bay. It's open to the public. There's another speaker also and we go from 10:00 a.m. to noon. Here... MORE

My Talk at Berkeley

Central Planning vs. Local Knowledge
David Henderson
One enterprising student, Scott Gibb, recorded all but the first two minutes of the talk I gave at Berkeley earlier this month. The sound quality is quite high. My talk is titled, "The Case For a Non-Interventionist Foreign Policy." It's... MORE

Is There an Asymmetry in Benefits from Trade?

International Trade
David Henderson
Don Boudreaux has written one of those rare letters that I don't quickly agree with. He writes: Discussing expanded American trade with the Chinese, President Obama told a business group in Honolulu "those are potential customers for us in the... MORE

My Talk at Berkeley and My MSNBC Appearance

Upcoming Events
David Henderson
I'm giving a speech tomorrow at U.C. Berkeley that I should have advertised here earlier. Title: The Case for a Non-Interventionist Foreign Policy Time: 3:00 p.m. to 3:50 p.m. Place: East Pauley Ballroom of the Martin Luther King Jr. Student... MORE

My Segment on Stossel

International Trade
David Henderson
Here's my segment on Stossel. It's the one where he interviews me alone about: Buy American, fair trade, and "sweatshops." But it doesn't have the segment where all 4 segments, including me, respond to the audience and challenge each other.... MORE

Bill Niskanen, RIP

Public Choice Theory
David Henderson
William A. Niskanen, an economist who held an amazing number of different interesting jobs, died yesterday. Early in his career, he was a Robert McNamara whiz kid. His experience in the bureaucracy led him to write his early contribution to... MORE

My Friend Sarah

Economic Education
David Henderson
I still think this is one of the best 3-minute videos on economics.... MORE

How Important Was Smoot-Hawley?

International Trade
David Henderson
I used to think that the Smoot-Hawley tariff was the fourth most important cause [of the Great Depression]. But Douglas Irwin's new book, Peddling Protectionism, has convinced me that Smoot-Hawley, though bad, was even less important than I had thought.... MORE

Openness in the Gilded Age

Economic History
Bryan Caplan
A great debating point by Don Boudreaux:[Pat Buchanan] frequently asserts that 19th-century America's policy of relatively high tariffs, along with its impressive economic growth, proves that protectionism promotes prosperity.  End of story; full stop; no further analysis is necessary.  Fact... MORE

Roundabout Production

International Trade
Arnold Kling
Timothy Taylor writes, Here's a table combining several studies, showing a rise in foreign value-added in exports from 18% in 1970 to 24% in 1990, 27% in 1995, and 33% by 2005. This is a sign of longer global supply... MORE

My Debate with Ian Fletcher, Part Trois

International Trade
David Henderson
Ian Fletcher responded to my last post as follows: You accuse me of wanting "the government to interfere in people's lives." I'd like to plead cheerfully 100% guilty as charged to that. Although a government that doesn't "interfere in people's... MORE

Debate with Ian Fletcher, Part Deux

International Trade
David Henderson
I appreciate a number of the comments people made on my previous post on my debate with Ian Fletcher, both the tone and the content. On tone, I want to highlight Tom West, whose tone I always appreciate. On content,... MORE

My Debate with Ian Fletcher

International Trade
David Henderson
After my article appeared in which I criticized Ian Fletcher's argument for more manufacturing in the United States, Fletcher responded by e-mail and we carried on a back-and-forth debate. It was pretty civil on both sides, something that, unfortunately, is... MORE

The Right Amount of Manufacturing

International Trade
David Henderson
In my latest Freeman column, I take on Huffington Post author Ian Fletcher on his claim that the United States doesn't have enough manufacturing. Some excerpts from my article: To judge whether a sector of the economy is too small,... MORE

Mercantilism, "Chopsticks" and Otherwise

Labor Market
David Henderson
Last week at the APEE meetings in Nassau, I saw economist George Ayittey give a talk on why most African economies are in such sad shape. He blamed the things free-market oriented economists tend to blame: foreign aid, the absence... MORE

Mercantilism Lives

International Trade
David Henderson
They're baaaack. Mercantilists, that is. Charles Hooper writes: Whether they realize it or not, many modern politicians of various stripes are mercantilists. Just watch the news and you'll see those in our government and in the media expressing predominantly mercantilist... MORE

Greenspan on the Economy

Macroeconomics
David Henderson
Yesterday, CNBC's Squawkbox had Alan Greenspan on for an extensive interview. The difference between the communication skills of Alan Greenspan as economic commentator and the communication skills of Alan Greenspan as Fed Chairman is like the difference between day and... MORE

Thank goodness for international trade and the web. Glenn Greenwald has an excellent piece telling us what the New York Times essentially told us if anyone cared to notice: the New York Times admits that it enabled the U.S. government's... MORE

The "Right" Amount of Manufacturing

International Trade
David Henderson
Free-trade critic Ian Fletcher argues that the United States has too little manufacturing. Even if manufacturing output is at an all-time high, he argues, it's still too low. So clearly he has in mind some amount of manufacturing that is... MORE

In a hearing before a House Subcommittee headed by Congressman Ron Paul on February 9, Democratic Congressman William Lacy Clay attacked an economist who testified on monetary policy because the economist had written, among other things, the following: And as... MORE

The Locavore's Dilemma

International Trade
David Henderson
The Feature Article on Econlib this month is "The Locavore's Dilemma" by Jayson L. Lusk and F. Bailey Norwood, both agricultural economics professors at Oklahoma State University. Its subtitle, "Why Pineapples Shouldn't be Grown in North Dakota," is, of course,... MORE

My Review of Hubbard and Navarro

Energy, Environment, Resources
David Henderson
From "Good on Taxes, Bad on Trade," my review of Glenn Hubbard's and Peter Navarro's book, Seeds of Destruction in the latest Policy Review: The strongest chapter, by far, is the one titled, "Why You Can't Stimulate Your Way to... MORE

Boudreaux on Free Trade and Culture

International Trade
David Henderson
The wealth, freedom, and diverse experiences of a commercial culture liberate artists and educators both to be more creative and to cater to the demands of the general population. In a poor society in which only a small elite has... MORE

Trade War: Boudreaux's Case for Pacifism

International Trade
Bryan Caplan
Last week, Don Boudreaux praised my attempt to re-explain the Law of Comparative Advantage, but his latest post on the same theme puts mine to shame:If governments fought real wars like they fight trade wars, here's how the transcript of... MORE

Trivia Question

International Trade
David Henderson
Who was the first economist to win the Nobel prize? It's not as obvious as you might think. A hint (it's a very subtle hint) is in the category in which I listed this post.... MORE

You've probably noticed that imports are labeled by national origin.  This is usually required.  The most obvious effect of such regulation is to slightly disadvantage foreign producers by raising their cost of production.  But the only slightly less obvious effect... MORE

In Praise of Don Boudreaux

Economic Education
David Henderson
Economics in One Letter Almost every morning when I wake up, one thing I can count on in my e-mail inbox is a letter written by Don Boudreaux earlier that morning in which he takes on this or that economic... MORE

My Vacation Plans

International Trade
David Henderson
I'm going on vacation Thursday morning here. I'll be there until August 15. Sometime tomorrow and for a four-hour layover in Denver on Thursday, I'll pre-program some posts on things I've been thinking about. I'll also go on line from... MORE

Markets For Everything: North Korean Edition

International Trade
David Henderson
It turns out that the people in red who were cheering for North Korea in their soccer game against Brazil weren't North Koreans at all, but Chinese actors. According to Hunter Stuart in the Huffington Post, the North Korean government... MORE

Free Trade for Gaza

International Trade
David Henderson
Tom Palmer has an excellent post on why it's important to let people in Gaza engage in free trade. Currently, the Israeli and Egyptian governments have extreme restrictions on trade, something I posted on recently. Palmer writes: The trade embargo... MORE

Human Ingenuity in Gaza

International Trade
David Henderson
You can get a brand new BMW in the impoverished Gaza Strip, but it'll come in pieces which you'll have to weld together. This is from an article on the effect of restrictions on car imports into Gaza. What I... MORE

Why Bryan Caplan's CEA Veto Wouldn't Work

Public Choice Theory
David Henderson
In which the author shows himself to be more Caplanesque than Caplan I was reading through Bryan Caplan's excellent lecture notes on "Constitutions" for his Public Choice course. (Parenthetically, I'm blown away by the clarity and wisdom of his notes,... MORE

Beautiful Cadillac Commercial

International Trade
David Henderson
I get so serious on this blog. So I thought I'd share a lighter moment: three moments actually. Check out this stunning Cadillac commercial from China. HT to Karen Selick.... MORE

Sanctions and Game Theory

Game Theory
David Henderson
Jacob Hornberger had an insightful blog post on Friday in which he applied basic game theory to the issue of sanctions. He didn't use the term "game theory," but he did the key thing that game theorists do: in thinking... MORE

Buy Local

International Trade
David Henderson
My friend Ted Levy sent me the following story: I'm walking through a local Phoenix mall and pass a kiosk for Rosetta Stone, the language-learning software. There's a sign indicating $125 off each course. I ask the woman manning the... MORE

Russ Roberts, Meet Paul Krugman

International Trade
Arnold Kling
This week's econtalk is a monologue by Russ Roberts on the topic of trade. My one quibble is that he brings up increasing returns as a source of specialization and trade without mentioning Paul Krugman's work on the topic. That... MORE

Bhagwati vs. Blinder

International Trade
David Henderson
My review of Jagdish Bhagwati and Alan S. Blinder, Offshoring of American Jobs, appears in the latest issue of Regulation. I show that although Bhagwati had accused Alan Blinder of dropping his belief in free trade, the accusation was unfounded.... MORE

In his latest TV ad for subsidies for wind-generated power, T. Boone Pickens states words to the effect: Much of our oil is imported from countries that hate us. Pickens uses this to argue that the U.S. government should subsidize... MORE

Balance of Payments

International Trade
David Henderson
The latest Freeman just came on-line and carries my piece on the Balance of Payments. It's basic economics that many people who read this blog already know but also many probably don't. Some highlights: Quick. What's the trade deficit between... MORE

Bob Murphy on Krugman

International Trade
David Henderson
Krugman Confuses an Accounting Identity With Causation In a post titled, "Things Free Trade Doesn't Do," Krugman wrote: There are a lot of good things you can say about international trade. But it does not, repeat not, do anything to... MORE

More on Economic Sanctions

International Trade
David Henderson
Because discussion after about 12 hours on a given post tends to be ignored, I'm using this post to respond to some of the comments on my previous post. Commenter Mike Rulle argues: It is incorrect to say that people... MORE

The Problem With Economic Sanctions

International Trade
David Henderson
When governments impose sanctions on people in another country, the main goal of the officials who favor the policy is to harm the person or people in charge of that country's government so that they will change their policies. That's... MORE

CBS's Propaganda on Gold

Labor Market
David Henderson
In the lead segment of "60 Minutes" last night, CBS did the unusual: it presented an incoherent story. The topic was gold being mined in the Congo, many of the proceeds of which are used for war. That was how... MORE

International Trade Economists are Bayesians

International Trade
David Henderson
In Bryan's excellent recent post on why most economists aren't Bayesians, he writes that the position of economic theorists is: If no one has proven that Comparative Advantage still holds with imperfect competition, transportation costs, and indivisibilities, only an ignoramus... MORE

Mad About Trade

International Trade
David Henderson
I've been enjoying Daniel Griswold's new book, Mad About Trade. It's the best of all the popular books on trade that I've read in the last few years. It's heavy with facts, many of which I "kind of" knew. But... MORE

Weird Economics at G-20 Summit

International Trade
David Henderson
From the September 22 Wall Street Journal: Those countries running current account deficits, most notably the U.S., would have to define ways to boost savings. Nations running surpluses -- China, Germany and Japan, among others -- would detail how they... MORE

Unintended Consequences of Regulation

Regulation
David Henderson
From yesterday's Wall Street Journal, two good old-style news stories on the consequences of regulation. To Outfox the Chicken Tax, Ford Strips Its Own Vans BALTIMORE -- Several times a month, Transit Connect vans from a Ford Motor Co. factory... MORE

Obama's Baby Step on Free Trade

International Trade
David Henderson
Finally, I have something positive to say about Obama's economic policy. Last Thursday the U.S. government lifted a number of restrictions on trade with Cuba. The Treasury Department lifted most restrictions on family travel to Cuba and also lifted limits... MORE

Rose D. Friedman, RIP

International Trade
David Henderson
As many of you have heard, Rose Friedman died yesterday of heart failure. She was a sweet and graceful, but tough, lady. I first met her at the 1974 Austrian Scholars' conference in South Royalton, Vermont. I sat with her... MORE

CAFE Kills (GM)

International Trade
David Henderson
General Motors does produce competitive cars and trucks, but not one of them is small. Consumer Reports recommends three GM cars and three GM trucks. The recommended cars are the Chevy Malibu (the unrecommended hybrid has been dropped), the large... MORE

Buy Global

International Trade
Arnold Kling
Don Boudreaux always gets to the heart of these issues. Suppose, for example, that shirts can be made in one of two ways. The first is by hand. It costs a shirt maker using this method--regardless of how many shirts... MORE

Off on Vacation

International Trade
David Henderson
Dear Econlog Readers, My wife and I get up bright and early tomorrow morning to go to Grand Cayman for a week's vacation. For that reason, I won't be posting as much as usual. Best, David... MORE

I Take (Some of) It Back

International Trade
David Henderson
In my recent post praising Krugman's popular writing on international trade, I highlighted the following quote from one of his essays: the United States is not now and may never be as open to trade as the United Kingdom has... MORE

Krugman on Pop Internationalism

International Trade
David Henderson
In the comments on my post on Paul Krugman's Hooverite view of wages, we had an interesting discussion of Krugman's work over the years. I'm a big fan of much of his work in the 1990s and one of the... MORE

Short Debate with Jane Orient, M.D.

International Trade
David Henderson
I have long been a fan, at a distance, of Jane Orient, who has carried on a years-long battle against government regulation of health care. (I note, though, that I have never seen her state her opposition to government licensing... MORE

Free Trade Petition

International Trade
Bryan Caplan
My old friend and mentor Tom Palmer urged me to sign this petition in defense of free trade with these words: "It is super important -- to me, but I think to everyone else, too."  The highlight of the petition:But... MORE

Me on KQED-FM

International Trade
David Henderson
On Thursday, February 5 at 9:00 a.m. PST, I'll be on KQED-FM in San Francisco until 10:00 a.m. The show is called Forum. The topic: the "Buy American" provisions in the "stimulus" bill. The other person being interviewed is Harley... MORE

What If Fama Was a Protectionist?

International Trade
Bryan Caplan
Here's a Fama-flavored argument for protectionism.GDP = Consumption + Investment + Government Spending + Net ExportsNet Exports = Exports - ImportsThe larger Imports are, the smaller Net Exports are, and the smaller GDP gets.Therefore, Imports reduce GDP, and keeping out... MORE

A Weak Case for Free Trade

International Trade
David Henderson
Today's Wall Street Journal published one of the weakest cases for free trade it has ever published. The Journal, which is traditionally quite pro-free trade, published an op/ed by former Democratic congressman James Bacchus. In it, Bacchus talks up the... MORE

More on Autos

International Trade
David Henderson
My co-blogger Arnold has an excellent blog on the auto industry. There's more to say, though. Notice his first quote from Obama: The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce... MORE

Energy Independence

Energy, Environment, Resources
David Henderson
Unfortunately, or fortunately, depending on how you look at it, presidential campaign years give us economists a lot of "teaching moments," that is, chances to educate the public about basic, important economic truths. This campaign year is no different. I... MORE

Congratulations, Paul Krugman

International Trade
Arnold Kling
He wins this year's Nobel in economics. Tyler Cowen has an excellent commentary and links. Before Krugman, the only explanatory variable in international trade was factor endowments. You produced stuff because you happened to have the right type of land,... MORE

Reasonable Economics

International Trade
Arnold Kling
Drew Carey goes after trade-bashers in a video that would fit well with an intro economics class.... MORE

Globalization and Moral Intuition

International Trade
Arnold Kling
Tyler Cowen writes, most people support their countries to a highly irrational degree in most international questions or disputes. This is part of a long counterpoint to Dani Rodrik on why people oppose free trade. One way to view the... MORE

Reducing Ignorance, Facilitating Irrationality?

International Trade
Bryan Caplan
The Cato Institute is making it really easy to discover politicians' voting records on free trade. With the click of a button, for example, we can find out the trade positions of Dorgan and Wyden, the demagogues who bedeviled Robin... MORE

Another Parable

International Trade
Arnold Kling
Greg Mankiw writes, A 2006 poll of Ph.D. members of the American Economic Association found that 87.5 percent agreed that “the U.S. should eliminate remaining tariffs and other barriers to trade.” The benefits from an open world trading system are... MORE

Trade and Hegemony

International Trade
Arnold Kling
My latest essay says, In the absence of hegemony, trade is impaired. If Marco Polo wants to buy goods in Afghanistan and sell them in China, he has to be able to avoid having his goods stolen, either by bandits... MORE

I Have Conditions

International Trade
Bryan Caplan
If you don't like telling people No, a convenient alternative is setting conditions you know other people won't accept. Then the impasse is their fault, you see. Take free trade, for example:...Democrats do not flat-out oppose lower barriers to trade,... MORE

How Globalization Will Save Your Life

International Trade
Bryan Caplan
I second Arnold's recommendation of Alex's column in Forbes. But for me, the highlight is the way that he explains the link between population and economic growth, and the demand and supply of innovation. First, demand:The cost of developing drugs... MORE

Alan Blinder on Globalization

International Trade
Arnold Kling
He writes, Americans who want to stop the world fear that the nation either already is or is destined to become a victim of globalization. Such pessimism seems downright un-American. It is also fundamentally illogical. After all, much of globalization... MORE

Classic Economics

International Trade
Arnold Kling
A 2-1/2 minute video lesson, from Milton Friedman. It is based on the story I, Pencil, by Leonard Read. Thanks to Don Boudreaux for the pointer.... MORE

The Worlds Oldest Algorithm?

International Trade
Arnold Kling
If you believe Matt Ridley, it's Ricardian comparative advantage. His is one of many answers to the Edge question of What's your formula? your equation? your algorithm?. Other interesting answers from Tooby, Kurzweil, Haidt, and many others.... MORE

Where Nationalism Meets Socialism

International Trade
Bryan Caplan
I was surprised to find this at the Common Dreams News Center ("Breaking News and Views for the Progressive Community"):[R]eal free trade implies not only duty-free movement of goods and capital, but free movement of labour across borders, which neither... MORE

Roberts Rules

International Trade
Arnold Kling
The New York Times turned Russ Roberts loose, along with some other economists, on the Republican Presidential debate. One of Roberts' comments: Mr. Romney is asked if he still supports trade even though we’ve lost 5 million jobs to foreign... MORE

Trade and the National Good

International Trade
Arnold Kling
Robert Driskill writes First consider the assertion that "nations generally gain from trade, however, it is quite possible that international trade may hurt particular groups within nations... ." What could the authors [Krugman and Obstfeld, in a leading international economics... MORE

China-Bashing

International Trade
Arnold Kling
The Washington Post reports, Powerful senators from both sides of the aisle, Schumer among them, are pushing two bills that threaten retaliatory action if China does not budge. For the first time, the idea is gaining broad support. The bills... MORE

Scheve and Slaughter have gotten a lot of attention for their Foreign Affairs piece on "A New Deal for Globalization." They argue that we can squelch popular support for protectionism by making the tax code more progressive:The best way to... MORE

The Ingredients and the Recipes

International Trade
Arnold Kling
Hal Varian describes a study that gives insight into the details of globalization. Even though Chinese workers contribute only about 1 percent of the value of the iPod, the export of a finished iPod to the United States directly contributes... MORE

Bottom Line Blinder

International Trade
Bryan Caplan
Alan Blinder's been making waves by fretting about outsourcing. But here's the bottom line, via Mankiw: After the Blinder-Bhagwati debate last week, there was a dinner at the Harvard Faculty Club at which Ben Friedman asked Alan a good question:... MORE

First World Subsidies and Third World Poverty

International Trade
Bryan Caplan
I never touch the stuff, but tomorrow I'm on a panel discussing the coffee trade at the Johnson Center. It's all part of GMU's International Week. While getting ready for the talk, I was pleased to learn that activists concerned... MORE

A Faustian Bargain: Romania and Bulgaria Join the EU

International Trade
Bryan Caplan
One day I expect my sons to give me a grand tour of Romania. Thanks to their mom, grandparents, and company, my sons' Romanian is at least as good as their English. So I've got more than just an academic... MORE

Anti-Foreign Car Guys to Japan: Thanks!

International Trade
Bryan Caplan
The most vociferous bearer of anti-foreign bias that I know is also a life-long car afficionado. (He and his buddies call themselves "car guys.") A couple of days ago he was telling me about the low level of quality control... MORE

Trade Deficit? What Trade Deficit?

International Trade
Bryan Caplan
According to standard government statistics, the U.S. has accumulated a massive debt to the rest of the world during the last three decades - over 5 trillion dollars. No statistical tricks, however clever, are going to erase that debt. Or... MORE

Doha Collapse

International Trade
Arnold Kling
Clive Crook writes (link expires next month), Liberal trade works exactly like a resource-saving technology. So, it makes exactly as much sense for a country to deny itself the advantages of open borders to trade as it would to deny... MORE

Good for Whom?

International Trade
Arnold Kling
I blame Tyler Cowen for pointing me to this post by Matthew Iglesias. one is constantly reading articles in the press condemning one European electorate or another for refusing to agree to "painful" reforms that are nonetheless "necessary." This example... MORE

My take on anti-foreign bias

International Trade
Arnold Kling
In my latest essay, I write, The Battle of the Borders is a distraction. In the context of an existential threat coming from militant Islam, Mexicans and other Hispanics seeking better opportunity in the United States are, at worst, a... MORE

Framing Anti-Foreign Bias

International Trade
Bryan Caplan
Non-economists suffer from anti-foreign bias, a tendency to underestimate the benefits of interacting with foreigners. But how stubborn is this bias? A well-crafted survey by Michael Hiscox has the answers. Everyone in his sample was asked "Do you favor or... MORE

Measuring Skill

International Trade
Bryan Caplan
How can you tell whether a worker is "low-skilled" or "high-skilled"? Most economists' knee-jerk reaction is to see how many years of education the worker has. But a far better measure is simply labor income. If you've got a Ph.D.... MORE

The Führer of Anti-Market Bias

International Trade
Bryan Caplan
Economic historians have long known that a key plank of Nazi economic policy was autarky. They took the usual nonsense about the dangers of foreign trade seriously, and tried very hard to eliminate Germany's "dependence" on the rest of the... MORE

Debating Trade

International Trade
Arnold Kling
Angry Bear reports that some bloggers on the left have been having a debate on whether or not free trade is a good thing. In my view, those who think "not" are doomed to intellectual failure. One of the good... MORE

Anti Anti-dumping

International Trade
Arnold Kling
Greg Mankiw and Phillip L. Swagel write, In February, seven of nine newly elected senators publicly endorsed the Byrd Amendment, a provision that encourages American companies to file antidumping lawsuits by awarding the revenues collected from the resulting tariffs to... MORE

Sweatshop Wages

International Trade
Arnold Kling
are better than average wages, according to Benjamin Powell and David Skarbek. Their longer paper is here. It says, The apparel industry has been widely criticized for "exploiting" Third World workers in sweatshops, but the data show that these workers... MORE

Vernon Smith on Globalization

International Trade
Arnold Kling
In a wide-ranging lecture, Vernon Smith says, No one has said it better than David Hume over 250 years ago, when he said that there are just three laws of human nature: 1) the right of possession, 2) its transference... MORE

Tariffs, Quotas, Games, and Drugs

International Trade
Arnold Kling
Gary Becker makes the case against the drug war. After totaling all spending, a study by Kevin Murphy, Steve Cicala, and myself estimates that the war on drugs is costing the US one way or another well over $100 billion... MORE

Energy Conservation

International Trade
Arnold Kling
In this essay, I argue that energy conservation is not a useful tool of foreign policy. In my view, the worst policy option of all is to subsidize the use of alternative forms of energy. If other forms of energy... MORE

Free Trade with the AARP

International Trade
Arnold Kling
Should you join the AARP if you disagree with its political positions? Carrie Lukas says no. So does Professor Bainbridge. Why? Because they are just one more liberal special interest group, albeit a particularly well camoflauged and effective one (using... MORE

Debating Outsourcing

International Trade
Arnold Kling
The link may only work for a day, but Tyler Cowen and John Irons go at it on the online WSJ over outcourcing. I think that Tyler supplies all of the highlights: Outsourcing resembles technical progress in its economics; in... MORE

Outsourcing

International Trade
Arnold Kling
Bruce Bartlett surveys recent cost-benefit analysis. In July, economist Martin N. Baily, chairman of the Council of Economic Advisers under President Clinton, looked at who benefits from outsourcing. He found that... on balance, the U.S. economy gains $1.12 to $1.14... MORE

Trade Conference

International Trade
Arnold Kling
I attended most of this Cato Institute Conference on trade, outsourcing, and the labor market. A few notes: Federal Reserve Board Vice-Chairman Roger Ferguson's opening speech was outstanding. I commend it to anyone who teaches undergraduate economics as a useful... MORE

Outsourcing Data

International Trade
Arnold Kling
Daniel Drezner writes that actual data on outsourcing has been hard to come by. Now, however, we can add some actual figures to the overheated debate. The Government Accountability Office has issued its first review of the data, and one... MORE

Wages Move Toward Equilibrium

Labor Market
Arnold Kling
Bruce Nussbaum of Business Week writes, the surge in companies going to India, China, and Eastern Europe in search of very cheap brainpower may soon be coming to an end -- far sooner than anyone has anticipated. Why? Simply put,... MORE

Paul Samuelson

Austrian Economics
Arnold Kling
Since the name of Paul Samuelson came up recently, I thought I would toss out a few random impressions of him. I only had Samuelson for one course, which I believe was in the Spring of 1977. It was part... MORE

Outsourcing Muddles

International Trade
Arnold Kling
Can trade make us worse off? Evidently, Nobel Laureate Paul Samuelson is going to make that claim. Trade, in other words, may not always work to the advantage of the American economy, according to Mr. Samuelson. In an interview last... MORE

Disintermediation and Outsourcing

Labor Market
Arnold Kling
Julian Sanchez picked up from Gene Healy a Times of India story with a new twist on outsourcing. Says a programmer on Slashdot.org who outsourced his job: "About a year ago I hired a developer in India to do my... MORE

Time to Dump "Dumping"?

International Trade
Michael Munger
by Michael Munger Guest Blogger Dumping, or the practice of a producer in one market selling below cost in another market to drive out competition, has a dubious logical pedigree. But its political history is second to none: a perfect... MORE

The Case for Free Trade

International Trade
Arnold Kling
Three recent pro-trade articles of interest. First, Peter Gordon refers to some academic surveys in support of the benefits of globalization. Second, the Washington Post argues that the Democrats' platform is too anti-trade. Finally, Joseph Stiglitz argues that international trade... MORE

Export-led growth?

Growth: Causal Factors
Arnold Kling
Two piece in the Wall Street Journal challenge the idea that export-led growth is the path to economic success. Amar Bhide writes, The Indian software industry now employs around half a million professionals. Under optimistic projections, the industry will add... MORE

Indian Labor Productivity

International Trade
Arnold Kling
I'm at a conference put on by the Milken Institute, and hence the light blogging. At one session on outsourcing and jobs, Clarence Schmitz, the CEO of an outsourcing firm, said that they had anticipated needing 1.2 Indian workers to... MORE

Outsourcing Winners and Losers

International Trade
Arnold Kling
When you open up trade opportunities, will the benefits go to people with high incomes or people with low incomes? Brad DeLong walks through the logic that says that if foreigners have a comparative advantage in high-income occupations (such as... MORE

Where Can America Compete?

International Trade
Arnold Kling
Netscape founder Marc Andreessen has some suggestions, including: * Innovation and entrepreneurialism -- anything new we tend to be really good at * Software design * Advanced chip design (CPUs, 3D accelerators, etc.) * Networking systems design ... * Law... MORE

The Free Trade Case

International Trade
Arnold Kling
Brink Lindsey offers "one-stop shopping" for a list of common complaints about trade and outsourcing and their refutations. One excerpt: Again and again, serious and influential voices have raised the cry that the sky is falling. It never does. The... MORE

Economists as Heretics

Social Security
Arnold Kling
In this essay, I argue that Congress treats economists the way the Inquisition treated heretics. Why do the Inquisitors have it in for economists? Ultimately, politicians tell the people what we want to hear. They think that we want to... MORE

Extreme Free Trade

International Trade
Arnold Kling
What happens when you take free trade to extremes among states with uneven incomes? Virginia Postrel suggests looking at the fifty United States as an example. The United States is one giant free trade zone. Businesses can move their plants,... MORE

Block that Free Lunch

International Trade
Arnold Kling
Russell Roberts speculates on what might happen if Indian outsourcing really gets out of hand. suppose Indians decided to work for free and give away the software, the ultimate competitive threat. If outsourcing work to low-wage Indians is bad, surely... MORE

Benedict Arnold Legislators

International Trade
Arnold Kling
Walter Williams explains how sugar protectionism has caused candy manufacturing to be outsourced. the protectionist miracle that Congress has created for the sugar industry has cost anywhere from 7,500 to 10,000 jobs in sugar-using industries due to higher sugar costs.... MORE

Saving Jobs from Outsourcing

Labor Market
Arnold Kling
Stuart Anderson looks at the arithmetic of Indiana's effort to save jobs from outsourcing. Out of 65 contract employees, Tata would have employed a number of Hoosiers through an Indiana-based subcontractor, but would also have used Indians currently employed by... MORE

The High-Cost Producer

Economics of Health Care
Arnold Kling
Alex Tabarrok points out how government ends up paying too much for pharmaceuticals. in some areas, Medicaid accounts for a large fraction of the market...In this situation it makes sense for pharmaceutical companies to raise prices - they lose customers... MORE

Finite Labor Supply in India

International Trade
Arnold Kling
Anti-outsourcing alarmists say that India has an "infinite supply of cheap labor." If that were true, then we would not be reading stories like this. According to a Nasscom Hewitt Total Rewards Survey 2003, the entry level salary (junior software... MORE

Cost-of-Living Arbitrage, II

International Trade
Arnold Kling
I received a lot of pushback on my earlier post. Comments and email have pointed out that (a) the cost of living really is five times lower in India and (b) Indian expatriates are indeed moving back home to take... MORE

Cost-of-Living Arbitrage

International Trade
Arnold Kling
An engineer from India emails me, The purchasing power parity in India is 5 compared to USA - a 20000 $ programmer in India is actually making 100,000 $ in terms of his spending power. ...an average programmer in India... MORE

Outsourcing

International Trade
Arnold Kling
It's the topic du jour. Here is Dan Pink's story for Wired. A century ago, 40 percent of Americans worked on farms. Today, the farm sector employs about 3 percent of our workforce. But our agriculture economy still outproduces all... MORE

Fine-tuning Immigration

International Trade
Arnold Kling
Two articles today discuss economic ideas for fine-tuning immigration policy. James Miller writes, The guest worker program should allocate visas to communities and then permit each community to decide how many of their visas to issue. For example, if Northampton,... MORE

Roll Over, Ricardo

International Trade
Arnold Kling
That was the title I wanted for this essay on comparative advantage, which pulls together several ideas that I first trotted out on this blog. The essay is lengthy. Here is a short excerpt: To see why trade balance is... MORE

Ricardo's Difficult Idea Eludes Wonks

International Trade
Arnold Kling
Alex Tabarrok has a timely post that links to another Paul Krugman classic on the gulf between economists and noneconomists on the theory of international trade. Krugman writes, it is not obvious to non-economists that wages are endogenous. Someone like... MORE

Getting Ricardo Wrong

International Trade
Arnold Kling
Charles Schumer and Paul Craig Roberts rewrite Ricardian trade theory. Comparative advantage is undermined if the factors of production can relocate to wherever they are most productive: in today's case, to a relatively few countries with abundant cheap labor. In... MORE

Economic Education

International Trade
Arnold Kling
Tyler Cowen recommends James Buchanan's "The Soul of Classical Liberalism," an essay published three years ago. As Cowen points out, Buchanan is wrestling with tough philosophical issues. Here, I just want to focus on a few sentences that bear on... MORE

Case for Globalization

International Trade
Arnold Kling
One of our comment threads discussed this essay by Kyle Markley that makes the economic case for globalization. All significant economic change creates a disaffected group of people, people whose economic situation is threatened by economic change. Such people bear... MORE

Smooting the Weasels

International Trade
Arnold Kling
Reason's Matt Welch comments on the story that the Bush Administration is going to refuse to allow bids for Iraqi reconstruction work from companies that are located in countries that did not support the coalition. 1) It [costs] the Iraqi... MORE

A Bad Month for Libertarians?

International Trade
Arnold Kling
In this essay, I say that libertarians had a bad month in November. Howard Dean came out in favor of re-regulation of "utilities, large media companies and any business that offers stock options." As Megan McArdle put it, "those of... MORE

Immigration Policy

International Trade
Arnold Kling
Samuel Brittan calls for an open immigration policy in the UK. If we favour the free movement of goods, capital and people, between Yorkshire and Lancashire, or between the north and south of England, why should a frontier make a... MORE

India and the U.S.

International Trade
Arnold Kling
Business Week runs a long, balanced article on India's economy and its relationship to the United States. For all its R&D labs, India remains visibly Third World. IT service exports employ less than 1% of the workforce. Per-capita income is... MORE

Trade Policy

International Trade
Arnold Kling
Who is setting trade policy in the Bush Administration? Certainly not Bruce Bartlett, who writes, one of the new trade restrictions applies to brassieres. Yet there is no domestic manufacturer of this product... The Bush administration has shown incredibly poor... MORE

Trade Deficit, Saving, and Tax Policy

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
I argue that our trade deficit is really a savings deficit. Increasing exports relative to imports is not a matter of beating up on China to live up to its commitments in the World Trade Organization. It is not a... MORE

Buffet's Trade Proposal

International Trade
Arnold Kling
A reader forwarded a proposal made by Warren Buffet in Fortune. We would achieve this balance by issuing what I will call Import Certificates (ICs) to all U.S. exporters in an amount equal to the dollar value of their exports.... MORE

Free Trade in Tech Labor

International Trade
Arnold Kling
Is the case for free trade weaker when the traded good is high tech labor? Julian Sanchez says no. [Protectionists] might fondly wish that highly educated professionals in Asia would be kind enough to lobotomize themselves and go back to... MORE

Our Loss, China's Non-gain

International Trade
Arnold Kling
Joseph Carson of Alliance Capital Management decided to investigate how many manufacturing jobs China has gained at the expense of other countries. The result was somewhat surprising. According to our analysis, between 1995 and 2002 roughly 22 million jobs were... MORE

Economics vs. Populism

International Trade
Arnold Kling
In this essay, I argue that economists face an uphill battle in dealing with populist beliefs about international trade, entitlements, and consumption versus saving. In my view, international trade is only one aspect of the overall phenomenon of Progress and... MORE

Cancun Trade Talks

International Trade
Arnold Kling
I've always thought of these world trade meetings as being no more significant than the anti-globalization protests that they spawn, but I'll defer to others, who think that they matter. Peter Gallagher owns the issue in the blogosphere (at least... MORE

Manufacturing Crisis?

International Trade
Arnold Kling
On Labor Day, President Bush announced that there would be a new Assistant Secretary of Commerce charged with addressing the decline in manufacturing employment. This prompted a number of skeptical responses. Yesterday, Daniel Gross wrote, The new assistant secretary must... MORE

Comment of the Week, 2003-08-20

Economics of Health Care
Arnold Kling
This week I got some well-deserved pushback on a couple of posts. Peter Gallagher was not impressed with the story of robots and comparative advantage. (Update: Gallagher posted a new comment with a more favorable interpretation of the robot example.)... MORE

Economics of Outsourcing

International Trade
Arnold Kling
Brad DeLong makes another attempt to explain the economics of outsourcing. Remember: few would be worried about "outsourcing" if the U.S. unemployment rate were still close to four percent, rather than at the above six percent level that it is.... MORE

Robots and Comparative Advantage

International Trade
Arnold Kling
Using the theory of comparative advantage, James Miller explains why robots cannot replace humans completely. Now, assume that in our simple wine/cake world robots begin large-scale manufacturing. They could easily change the relative prices of wine and cake. Perhaps if... MORE

Trade Deficit a Concern?

International Trade
Arnold Kling
To what extent is the large trade deficit reported for the U.S. a cause for concern? In my Bubbleheads essay a couple months back, I discussed some of the fears about the deficit and the apparently-overvalued dollar. Brad DeLong wonders... MORE

China Menace?

International Trade
Arnold Kling
The Washington Post's Steven Pearlstein warns about China, now on the fast track to becoming a dominant player in the global economy and causing major disruptions along the way. Here in the United States, entire industries are being quickly wiped... MORE

Comment of the Week, 2003-07-24

International Trade
Arnold Kling
Peter Gallagher wrote this on his site, but it still counts as a comment. I had asked how one might explain trade and comparative advantage to a journalist. I usually use...the story about the busy lawyer and her secretary. The... MORE

Trade Controversies

International Trade
Arnold Kling
The New York Times has several recent articles on international trade. One piece discusses IBM's evaluation of outsourcing. in recent weeks many politicians in Washington, including some in the Bush administration, have begun voicing concerns about the issue during a... MORE

Outsourcing

International Trade
Arnold Kling
I try to make the classic case for free trade in an article about outsourcing to India. In fact, a good way to attain clarity in discussing the issue of outsourcing is to substitute the phrase "economic activity" for outsourcing:... MORE

Come Back July 20

International Trade
Arnold Kling
I will be on vacation until July 17, and I presume it will take me a few days to get back to blogging. Meanwhile, TechCentralStation has a couple of articles of mine that they may run while I am away.... MORE

Comment of the Week, 2003-07-02

Growth: Causal Factors
Arnold Kling
In the discussion of perspectives on Social Security, I suggested that wages tend to rise with productivity, so that indexing Social Security to wages leads to higher benefits than indexing it to prices. Eric Krieg asked, Arnold, why are wages... MORE

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