Rationality and trade wars

EDDY BEKKERS, World Trade Organization (WTO)
Email: 
JOSEPH F. FRANCOIS, University of Bern - Department of Economics, Centre for Economic Policy Research (CEPR), Vienna Institute of International Economic Studies (WIIW), University of Adelaide - School of Economics
Email: 
DOUGLAS NELSON, Tulane University - Department of Economics
Email: 
HUGO ROJAS-ROMAGOSA, CPB Netherlands Bureau for Economic Policy Analysis
Email: 
This paper assesses the utility of economic theory of rational trade wars to predict such events or to prescribe courses of action to control their consequences. Trade wars are fundamentally political events whose causes are almost completely political and whose consequences are to a significant degree also political. Contemporary economic theory has developed during a uniquely peaceful and liberal period in world history, affecting how economists have thought about trade conflicts, leaving the profession unprepared to provide serious analysis or advice.

Comments

Post a Comment

Popular posts from this blog

supply chain management (call for papers)

Global supply chains (GSCs), which emerged from and thrived with globalization, are associated with technological changes and affected by industrial and trade policies. One lesser-known fact is that the cycle of globalization took place in waves, each has sequentially been followed by a downturn that eventually reshaped the cross-border flow of goods, capital, and people. The so-called second phase of globalization, which was empowered largely by the ICT revolution and politico-economical openness, has evidently faltered and slowed in the post-2008 financial crisis  Recent development of trade tensions, such as the U.S.-China conflict, the Brexit process, Japan-South Korea trade dispute, and other business dynamics towards deglobalization are readily affecting and will continue to affect GSCs. MORE .
Read more

Bastiat versus Trump: opposition to free trade rests upon errors, or, if you prefer, upon half-truths.

Image
"Debunking Protectionist Myths: Free Trade, the Developing World, and Prosperity"   Cato Institute Economic Development Bulletin, No.31, Forthcoming ARVIND PANAGARIYA , University of Maryland - Department of Economics, Columbia University Email: panagari@econ.umd.edu More than 170 years ago, Frédéric Bastiat noted in his masterly work Economic Sophisms that the “opposition to free trade rests upon errors, or, if you prefer, upon half-truths.”1 Ever since Adam Smith successfully replaced mercantilist orthodoxy with free trade doctrine in his celebrated book The Wealth of Nations, free trade critics have repeatedly challenged the doctrine, offering half-truths to bolster their case. In each instance, free trade advocates have successfully exposed the falsehood of arguments made by critics. Although free trade has gained increasing acceptance among policymakers over time, challenges to it have remained omnipresent. The latest of these challenges has manifested itself
Read more