Experimental Math

I, as usual, did not read this Dani Rodrik piece until another blogger thought to cite him (Mark Thoma–common habit with me). Sensible people will understand I should not comment on Dani’s Piece, as it required Math (I am probably more Math juvenile delinquent than Math Retarded), it being a Sunday Evening and I ready for bed. It simply found that I had to establish a more-advanced Equation for the shorted Equation which Professor Rodrik presented.

His Equation for total Movement to Free Trade:

0.5 x [t/(1+t)}^2 x m x e

where t=the Tariff rate, m=Import share of GDP, and e=the Price Elasticity (absolute) of Import Demand. It indeed leads to a rather minute number of Trade Gains for GDP. I am quite content with the general direction of Dani’s argument, but find I must adjust it to show that there would be negative aspect–or GDP retardation.

My Equation for the Movement to Total Free Trade:

0.5 x [t/(1+t)}(^2 x m x e) - {(Ctr-Tfr)/Ctr}

where t, m, and e remain the Same, and Ctr=the Capitalization of Transport and Port facilities, and Tfr=the Common Transport freight rates. It is Late, and I am tired, as well as not being that Good at This; but I think this is what real GDP that We can expect. What do I know! lgl