Clay R. Fuller | AEIdeas
The mafia-like nature of authoritarian states and why it matters
Clay R. Fuller | AEIdeas
Trump should repair trade deals, not destroy them
Neena Shenai and Joshua P. Meltzer | The National Interest
For many in Washington, the president’s decisions have been all but a declaration of war on the international trading system, an assault on the settled benefits of “globalization” that team Trump has decried from the beginning. But it’s high time “globalists” take some responsibility for the declining constituency for free trade. Now is the time to fix the system, recognize its flaws, and implement the fixes that will again mean prosperity for all Americans.
Consumption is America’s Achilles’ heel in a trade war
BY DAVID P. GOLDMAN
A trade war produces only losers and the Washington administration should not operate under the illusion that China is more fragile than the US
Growth, Not Tariffs, Will Fix our Trade Deficits
Jorge González-Gallarza, E21
President Trump yesterday pledged 10 percent tariffs on another $200 billion of Chinese imports. But economic growth is already eating away at the very trade deficit he’s seeking to ax with these tariffs. Trade data for May, when adjusted for seasonal variation, show that the trade deficit was down $3 billion from April—from $46.1 billion to $43.1 billion.
Does A Capital Account Surplus Necessarily Imply A Trade Deficit?
by David R. Henderson via EconLog
No. Bob Murphy explains why. He points out that a capital account surplus necessarily implies a current account deficit. But, he notes, a current account deficit is not the same as a trade deficit. Why?
Venn diagram of the day on trade as a form of technology
Mark J. Perry | AEIdeas
George P. Shultz On The Future Of The International System
interview with George P. Shultz via The Long Now Foundation
Hoover Institution fellow George Shultz discusses changing demographics and what that will do to shape the future more than the politics of Washington.
National And International Monetary Reform
by John B. Taylor via PolicyEd
Recent deviations from sound, rules-based monetary policy have led to an uneven economic recovery. The Federal Reserve should return to a rules-based monetary policy in order to promote economic growth and stability.
The Dark Matter of Trade
Ricardo Hausmann, Project Syndicate
The Dollar’s Privilege Is a Terrible Thing to Waste
Steven Englander, Bloomberg View
The Benefits Of International Trade
by John B. Taylor via Policyed.org
International trade allows countries to consume more goods than they can produce on their own. They can do so by specializing in the production of goods for which they have a comparative advantage. This is true even if the country has an absolute advantage on producing all goods more efficiently than the other countries it can trade with.
Some Thoughts On International Monetary Policy Coordination
by Charles I. Plosser via Economics Working Papers
In this short paper, I review previous efforts at international coordination among central banks. In particular, I highlight the ultimate failure of both the gold standard and the Bretton Woods regimes. In both cases, the desire for a fixed rate regime forcing each country to make domestic monetary and fiscal policies subservient to pressures from the external balance.
Remarks At The Panel "Toward A Rules-Based International Monetary System"
by John B. Taylor via Cato Institute
It is a pleasure to be on this panel on moving toward a more rules-based international monetary system. Over the past few years I have been making the case for such a system. In fact I made the case over 30 years ago in Taylor (1985), and the ideas go back over 30 years before that to Milton Friedman (1953). However, the case for such a system is now much stronger because the monetary system drifted away from a rules-based approach in the past dozen years and, as Paul Volcker (2014) reminds us, the absence of a rules-based monetary system “has not been a great success.”
Addicted to Dollars
Carmen Reinhart of Harvard University, describing a study she co-authored in February, reported that the US dollar has retained its dominant position as the global reserve currency despite America's declining share of global output over the past few decades. But she wondered how much longer that would last.
The Risk of a New Economic Non-Order
Mohamed El-Erian worries that failure to reform international governance institutions could lead to their breakdown.
New Russia sanctions: The “free trade” wing of the Republican Party has taken the United States into a trade war that it cannot win, David P Goldman contends. The new sanctions passed by the House and Senate last week force Europe into a de facto alliance with Russia against the United States, and by extension with China as well. It is the dumbest and most self-destructive act of economic self-harm since the United States de-linked the dollar from gold on August 15, 1971, and it will have devastating consequences. READ THE STORY HERE