# Tag Info

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Free trade is, on the whole, one of the few otherwise controversial policy topics on which economists have near-perfect consensus. Historically, this consensus has long been strong in the English tradition (Hume, Smith, Ricardo, Mill), albeit less strong elsewhere. Famously, 1028 American economists signed an unsuccessful petition in 1930 begging Herbert ...

7

I can get to more technical papers, but it's not a big secret what you have quoted. E.g. The Economist quotes MIT professor John Van Reenen: But just because the size of the pie expands [due to free trade], it doesn’t mean that everyone is better off. There are going to be some losers whose slice of the pie is so much smaller that they would have been ...

6

The underlying reason for persistent wage differences is probably that Mexican workers are less productive than American workers. It is sufficient that workers in some tradeable sectors are more productive to have persistent wage differences in all sectors. (a good explanation of this effect can be found here: https://en.wikipedia.org/wiki/Balassa%E2%80%...

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TL;DR It is fair to say that free markets played a non-trivial role in industrialization and that protectionism in Britain hindered industrialization. However, the Industrial Revolution was caused by many other factors than having relatively free markets. It required Britain to generally adopt set of inclusive institution (of which relatively free markets ...

5

I think the (or at least, a) relevant concept is that of non-tariff barriers to trade. Wikipedia has a nice summary. Let me quote a couple of sections from the article: Non-tariff barriers to trade (NTBs) or sometimes called "Non-Tariff Measures (NTMs)" are trade barriers that restrict imports or exports of goods or services through mechanisms other than ...

5

These two papers seem relevant. The large Indian wage premium for English language fluency suggests that there would be significant returns at the margin to providing services through trade instead of locally, but they are limited by the supply of foreigners with the right language skills. However, these premiums are largest among the skilled workers, ...

5

You seem to have it the wrong way around. The act of country A extending Most Favoured Nation status to country B only affects the import tariffs on country B's products, not those on other countries' products. MFN status means that the tariffs on the Most Favoured Nation's products cannot be higher than the lowest import tariff on similar products from ...

5

Have there been any economists who have argued in favor of national food self-sufficiency and what are some of their arguments? I am not knowledgeable of literature in that direction, but some of the arguments in the aforementioned excerpts are flawed. Simply put, self-sufficiency does not preclude free trade. The excerpt of The Economist certainly ...

4

Within Currency Areas This is not going to be exactly what you're asking for, which also goes into the realms of trade, but: The use of common language is extremely important. Many Economists consider the lack of common language to be one of the main reasons of the failure of the Euro zone. Optimum Currency Area theory says that even if the regions are ...

4

These estimates are almost certainly bs. The TPP would benefit consumers because easier imports may make consumer goods cheaper directly and through more competition on product markets. The TPP would hurt some workers, because increased import competition would force some American companies out of business. The TPP would benefit other workers, because their ...

4

The theory behind free trade is denominated comparative advantage, and as mike stated, the advantage is that a country, as a whole, benefits from specializing in the fields at which it is best, as it will get more than it would if it would produce everything alone. In practice, a big advantage is the ability to operate for a bigger market, reaping economies ...

4

Free trade agreements are not transitive. Each country in a free trade agreement needs to ratify it with a legislative or regulatory body. Otherwise there is no legal basis for it to function and customs officials won't be able to observe it. In practice if A and B have a free trade agreements and B and C do too, businesses can transship in the best case ...

3

Yes, Smith addresses these issues in Book 1 Chapter 10 of The Wealth of Nations. Firstly, he notes that where two jobs are in almost every respect equivalent, we should expect them to pay the same wage: "THE whole of the advantages and disadvantages of the different employments of labour and stock must, in the same neighbourhood, be either perfectly equal ...

3

I'm going to stick my neck out and say that the answer is no, not because I have a specific reference (people tend not to publish papers stating that something doesn't exist) but monetary systems has been a keen interest of mine for the past decade and if free banking was currently being practised somewhere I would almost certainly know about it. It has ...

3

You seem to think of a game where objects are obtained at a fixed rate by farming. Fix supply of work for a certain object (bc. Only a few people know where to find things to farm or are high enough level or have the right profession) and increase demand (new players coming in or more players buying in game currency for real money) then prices for the object ...

3

There are actually five different types of trading blocs: preferential trading areas, free trade areas, customs unions, common markets and economic (and monetary) unions [1]. A preferential trade area (PTA) is a trading bloc that reduces tariffs on particular goods between two countries but does not abolish them completely. There are no particularly well-...

3

As far as I know, free trade agreements don't automatically extend in a transitive way, but you may want to ask lawyers in international law or look it up. In practice free trade agreements between A and B and B and C are not equivalent to an agreement between A and C, because shipping goods directly from A to C makes them subject to import and export taxes....

3

The main argument for food self-sufficiency---endorsed by Bush in the quote you have---is that being dependant on other countries for food reduces the power a country can hope to wield on an international level. However valid or invalid, this is an argument that an economist would be very unlikely to make, as economists tend to focus their work exclusively ...

3

The classic answers is transfers through welfare programs, re-training etc. See this question which is almost a duplicate. I'm re-quoting from there, just with a different emphasis: But just because the size of the pie expands [due to free trade], it doesn’t mean that everyone is better off. There are going to be some losers whose slice of the pie is so ...

2

I am not sure what you mean by 'free-trade economies', but yes, most countries/trade areas championing the free market do impose all sorts of tariffs. You can read about it on the World Trade Organizations homepage. https://www.wto.org/english/tratop_e/tariffs_e/tariffs_e.htm As you pointed out there are all sorts of other tools such as defining ...

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Malaysia's Proton cars (if you want a specific example ), but overall the Malaysia Automobile industry failed. Currently, only the locals drive Malaysian cars.

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Free trade in theory allows for a greater division of labor by allowing countries as a whole to specialize rather than a section of each country specializing. In theory this should make every country involved wealthier as they can focus on doing more of what they're good at. Its the country level version of division of labor and trading in general.

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The US has a "Trade Adjustment Assistance" for (almost) this exact purpose. Trade Adjustment Assistance (TAA) is a federal program of the United States government to act as a way to reduce the damaging impact of imports felt by certain sectors of the U.S. economy. The current structure features four components of Trade Adjustment Assistance: for ...

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In general, no, it can't impose stricter rules on imports than it does on domestic production. Or more accurately, it could, but the countries exporting fur to Norway could challenge this. The guiding rule is that domestic industry cannot receive preferential treatment over importers. Norway can do it the other way around - that is to say, WTO rules would ...

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The only protection that sincere free trade offers is the increased competivity forced by the "natural selection" against foreign competitors. Protected economies tend to accumulate competitive disadvantages, which in the long run, may overcome the barriers to trade. Inserting distortions on the economy is like blocking the natural course of water. Market ...

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You get cheaper access to inputs. For a large advanced economy that is relatively diversified, it is possible that unilateral tariff reductions across many or all sectors can be good for the economy by freeing up resources presently occupied in low-value activities with few prospects to contribute to technological progress. The additional ease of doing ...

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1- Some basic macroeconomic fundamentals I highly doubt a trade imbalance is causing high inflation. The trade deficit is likely happening because of economists call "Twin Deficits". I'll spare you the accounting that leads to this equation and present you a setorial balances identity. Let $S$ be private savings, $I$ be capital formation, $G$ be government ...

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As of April 2018, the tariffs are targetted at products in which Chinese companies dominate. They would apply to products made by American companies in China and imported to the US, but the exact products covered have been chosen to minimise this effect. Nevertheless, it will most likely increase costs for American manufacturers that depend on imported ...

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