17 Mar 2016

Correcting Krugman on Trade

Krugman, Shameless Self-Promotion 1 Comment

Lately Krugman has been “correcting” right-wingers who justify trade liberalization on the grounds that it creates jobs. Yes that is a defensible opinion (because with flexible wages everybody can get a job, even under a complete blockade), but the way Krugman defends it is wacky. He talks about job growth in exporting industries offsetting job loss in importing industries. Yet I showed back in 2009 that this naive “GDP contribution” approach to trade is totally screwy.

One Response to “Correcting Krugman on Trade”

  1. Adrian Gabriel says:

    I really enjoyed the Mises article Dr Murphy. Aside from the more Austrian point of view in regards to the overassumptions and deceiving accounting in the GDP formula, you used statist tools to prove them wrong. I think I remember reading the article of the overlapping generations model where you did that as well. This is not the first time, and thanks for this. Indeed if you were debating someone then you could have used this segway to lead into the Austrian perspective on statist economics.

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