"What are the best policies for governments to adopt if they seek to promote long-run growth in living standards? Some argue that it is a choice between two policy extremes:
Seal the national borders and withdraw from the world economy!
Let trade, immigration, and investment across national boundaries take place in the absence of government regulation of any kind!
Few (if any) economists advocate either policy. The question is how to exploit the contributions of the global economy to a nation’s wellbeing, while minimizing the ways in which integration into the global economy may retard it." (Core Econ, Chapter 18). In today's class we will analyze the policy choices available to governments in confronting this question.
You should have read the following section in Chapter 18 ("The Nation and the World Economy") of Core Econ: 18.10 Trade and Growth.
Write a blog post about the sections you read for homework, relating the ideas in the reading to the country you have chosen to study.
Share a question that you would like to discuss as part of our Socratic Discussion today.
Participate in a Socratic Discussion. This rubric will be used to evaluate your blog post and discussion.
Come to class having developed a compelling question related to the country that you are focusing on in regard to a development problem related to globalization that it is currently facing.
Podcast: In this podcast, before a live audience at Stanford University's Hoover Institution Nicholas Crafts of the University of Warwick, Luis Garicano of the London School of Economics, and Luigi Zingales of the University of Chicago's Booth School of Business talk with EconTalk host Russ Roberts about these questions: What is the future of the European economy? What are the challenges facing Europe? What are the implications of Brexit for the United Kingdom and the rest of the Europe?
Paper: In this paper, Dani Rodrik analyzes the rise of populism in regard to globalization. Here is the abstract: "Populism may seem like it has come out of nowhere, but it has been on the rise for a while. I argue that economic history and economic theory both provide ample grounds for anticipating that advanced stages of economic globalization would produce a political backlash. While the backlash may have been predictable, the specific form it took was less so. I distinguish between left-wing and right-wing variants of populism, which differ with respect to the societal cleavages that populist politicians highlight. The first has been predominant in Latin America, and the second in Europe. I argue that these different reactions are related to the relative salience of different types of globalization shocks."
Blog: In this blog post, Dani Rodrik explains his "political trilemma" and in this one he explains how the trilemma relates to Brexit.
Podcast: In this podcast, Dani Rodrik of Harvard University talks with EconTalk host Russ Roberts about trade, the labor market, and trade policy. Drawing on a recent paper with Margaret McMillan on trade and productivity, Rodrik argues that countries have very differing abilities to respond to increases in productivity that allow production to expand using fewer workers in a particular sector. When workers are displaced by productivity increases, what is their next best alternative? Rodrik discusses how this varies across countries and policies that might improve matters. He argues that poor countries should subsidize new products as a way of overcoming uncertainty and externalities from new ventures.
Podcast: In this podcast, David Autor of MIT talks with EconTalk host Russ Roberts about the fundamentals of trade and his research on the impact on workers and communities from trade with China. Autor's research finds large and persistent effects on manufacturing jobs and communities where those jobs once were. Autor and Roberts discuss whether these results capture the full impact of increased trade with China and what the policy response might be that could help workers hurt by trade.
Podcast: In this podcast, Ed Learmer discusses whether outsourcing is good for America and how foreign competition affects wages in the United States? Leamer, professor of economics at UCLA, talks about the effects of outsourcing on wages, jobs, and the U.S. standard of living. Drawing on a review of Thomas Friedman's The World is Flat, Leamer talks with host Russ Roberts about technology, trade, productivity and inequality.
Book: On the Principles of Political Economy and Taxation by David Ricardo
Book: Robert Heilbroner (The Worldly Philosophers) on David Ricardo
Podcast: In this podcast, Nobel Laureate in Economics Angus Deaton of Princeton University talks with EconTalk host Russ Roberts about the economics of trade and aid. Deaton wonders if economists should re-think the widely-held view that redistribution from rich nations to poor nations makes the world a better place. The conversation focuses on the challenges facing poor Americans including the rising mortality rate for white Americans ages 45-54.