Trade Debates

Mark Thoma presents Paul Grieco’s response to Dani Rodrik’s criticism of this Paper. Dani Rodrik has a further response to the Grieco issuance.

Here is how I see it: Regional Trade treaties will not bring advantages to American GDP without a diffusion of Capitalization among foreign Import Providers. Economists can talk their numbers, but they are discussing models based upon previous data performance; it does not automatically translate to future Gains from Trade. The element I find most disturbing comes from David Menzie Chinn, who records that American Export Prices are increasing faster than foreign Import Prices (sans Oil).

I have not read the James Galbraith/Jeff Faux debate though I might should. I may not like the appellation of Protectionist more than Anyone else, but realize that the American domestic economy is starting to react to the Trade imbalance in a manner easily translatable into recessionary conditions. lgl