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AEI on Trade Deficits: The Stunning Conclusion
You have all waited with breath which is baited for the resolution. Last week I posted this AEI meme: …and said I thought there was a basic flaw in it, but I didn’t have time to type it up then. (To repeat, I’m sure the economists at AEI know this nuance; my point […]
Read moreAEI on Merchandise Trade Deficits
I follow Perry on Twitter and saw this: So, standard disclaimers: Trump’s policies on trade are awful, and his framing of the issues when he speaks to the public is also terrible. His policies, other things equal, will make Americans poorer, and he conveys a very confused understanding of the topic. Having gotten […]
Read moreOne Cheer and One Criticism for Don Boudreaux on Trade Deficits
(Notice kids that I’m doing this on my personal blog; I’m not picking a public fight with Don. Also, if Don has anything to say in response, I will edit this post and paste his reaction into the body, below.) I think it’s fair to say that nobody has been hammering home the case for […]
Read moreFree Traders Should Be More Careful When Defending Trade Deficits
In a recent WSJ piece, Robert Barro pushed back against Trump’s mercantilism by arguing: “Imports are things we want, whether consumer goods, raw materials or intermediate goods. Exports are the price we have to pay to get the imports. It would be great, in fact, if we could get more imports without having to pay […]
Read moreScott Sumner, Trade Deficits, and Dark Matter
Scott Sumner at EconLog pounced at the red meat I waved in front of him. (I had sent him Trump’s ludicrous tweet on trade wars.) One of Scott’s points was very interesting, and I want to make sure readers understand the claim. Specifically, Scott wrote, “4. Most people assume that the US runs a persistent […]
Read moreOn Trade Deficits: Murphy vs. The World, Part 2 of 3
In a previous post, I objected to Mark Perry’s own post about the U.S. trade deficit. The title of Perry’s post captures his point: “US has a net inflow of goods and a net inflow of capital. Team Trump wants the opposite?” I pointed out that if a populist in Japan tried to impose schemes to […]
Read moreOn Trade Deficits: Murphy vs. the World, Part 1 of 3
I disagree strongly with the rhetoric and substance of Donald Trump and his top advisors when it comes to trade deficits. For example, Peter Navarro’s recent WSJ op ed (which relied on the accounting tautology Y = C+I+G+Nx) could just as well “prove” that increased government expenditures are the way to boost real GDP and create […]
Read moreDefenses of Trade Deficits That Could Mask Danger
This EconLog post from Scott Sumner, and the accompanying post from Don Boudreaux, provide much useful pushback against typical worries about trade deficits. However, Sumner in particular makes some strong claims that are misleading, and the two posts together could understandably make critics think that free traders are naive and distracting people from a genuine […]
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