Trade and Development Blog

It's hard not to quote this compact blog post in full: What the average American thinks we spend on foreign aid – Chris Blattman : "27% of the federal budget vs what they think we ought to be spending (=13%) and what we’re actually spending (=0.6%)" [ source ]

Just as we move onto the topic of international public goods and multilateral negotiations on trade and climate, a significant negotiating meeting is happening in Cancun Mexico (this follows on the heels of a meeting in Copenhagen a few years ago). What's being discussed and negotiated is how to put in place a global cap and trade agreement to limit global emissions that are believed to contribute to global warming. Under a cap and trade system a global cap on the amount of emissions (measured say in billions of tons of CO2 gases) is set and tradable emission permits are set equal to that amount. Loosely, if you want no more than say X billion tons of CO2 gas emissions in a year only X billion permits are issued. Each country is allocated a quota of permits, and these are allocated within each country and are made tradable on international markets. Then if say a coal-fired electricity generator has only enough permits for 1000 tons of CO2 gas but it wants to emit 1500 it would h...

Free-Trade Pact With South Korea Still Not Finished - NYTimes.com The trade accord, an update of the one the Bush administration negotiated and signed in 2007 under so-called fast-track authority that has since expired, has languished in the Democratic Congress. Mr. Obama, though, has thrown his weight behind it — while calling for some technical modifications that would be more favorable to American automakers and industrial unions — and with Republicans soon to take control of the House of Representatives, he has a better chance of getting it through. ... The biggest sticking point involves auto imports. In Washington, the Democratic leadership has been pushing forcefully for lower nontariff barriers to American exports of cars to South Korea, and for eased restrictions on American exports of beef, which has been a source of controversy since an outbreak of mad cow disease in 2003. While the agreement would lower or eliminate tariffs on cars in both countries, the Obama administrat...

  We are a very oil dependent country, as Matt Yglesias points out .  Note also on the graph how much the US trade deficit improved with the recession:  when consumption falls, so does import consumption.

Princeton University economist Paul Krugman was awarded this year's Nobel Prize in Economics “for his analysis of trade patterns and location of economic activity.” This topic and Krugman's work turns out to be incredibly central to the study of economic development, as we will be discussing in class precisely this week (in Eco 330) and next (in Eco 730). Here is Freakonomics blogger Justin Wolfers with more detail on some of his contributions, and his more recent public profile as a New York Times columnist : Krugman’s accumulated scientific writings amount to an astonishing contribution. As an international economist, he has been working the same intellectual fields as giants like Ricardo, Samuelson, and Ohlin. Before Krugman, it was hard to believe that there was a lot more to be learned about trade theory, and the profession had moved on to what many believed were more fertile fields. Krugman’s insights helped bring trade theory into closer connection with data on how t...

On Wed Sept 24th at 2:30pm the Hunter Economics Department will host an informal panel discussion on the current turmoil in financial markets. Room to be announced here soon. 

Remember the term 'liquidity trap' from your Eco 100 discussion of the Great Depression? Paul Krugman fears we might be entering one right about now.. based upon amongst other things, the sudden one day dive in yields on US treasuries: This suggests investors flight to safe investments even if they yield very little at all, which in turn clearly signals their lack of interest in making most other types of loans that would normally be part of the money creation process. In such situations the Federal Reserve loses their ability to control the money supply. update 9/18: Paul Krugman checks the markets again this morning and finds that the return on the three month treasury is negative ! People are willing to pay $100 today for a treasury bill that pays less than $100 in three months time! As he points out, this didn't even happen in the Great Depression. No surprise then to hear this 3am announcement that "the world's biggest central banks planned to pump...