Feedback from users (or teachers) is appreciated.

My original explanation of the guide is here.

Rodríguez suggests two avenues for potentially more fruitful investigation: growth diagnostics and non-parametric regression.

American exports of recyclable material used by the Chinese to make boxes to ship exports to the US and Europe are declining steeply, says NPR.

HT: Sabrina.

[I]t is often asserted that China's currency policies have real effects that are equivalent to an export subsidy. In fact, however, if prices are flexible the effect of exchange rate intervention parallels that of a uniform import tariff and export subsidy, which will have no real effect on trade, an implication of Lerner's symmetry theorem. With sticky prices, the real effects of exchange rate intervention and the translation of that intervention into trade-policy equivalents depend critically on how traded goods and services are priced.

[T]he risk of a backlash against individual freedom is far more dangerous than the direct damage to poor countries caused by a global recession, falling commodity prices, or shrinking capital flows. We�??re already seeing this dangerous trend in Latin America...

A spreading fire of statism would find plenty of kindling already stacked in the Middle East, the former Soviet Union, Africa, and Asia. And there are many Western �??development�?? experts who would eagerly fan the flames with their woolly, paternalistic thinking.

To Jeffrey Sachs, perhaps the foremost of these experts, the crash is an opportunity to gain support for the hopelessly utopian Millennium Development Goals of reducing poverty, achieving gender equality, and improving the general state of the planet through a centrally planned, government-led Big Push...

[A]fter a long and scary Great Depression, democratic capitalism did survive. And the U.S. economy returned to exactly the same long-run trend path it was on before the Depression.

We also know that, for another important part of the world, democratic capitalism did not hold up so well. In many ways, that failure stemmed from a misguided overreaction on the part of a new, influential field of economics that was highly skeptical of capitalism, was deeply traumatized by economic calamity, and considered much of the world �??underdeveloped.�?? Born in the aftermath of the Depression, �??development economics�?? grew on a foundation of bizarre misconceptions and dangerous assumptions...

First, seeing Depression-style unemployment in every part of the world led these economists to assume that poor countries simply had too many people who were literally producing nothing... Second, these thinkers lost faith in bottom-up economic development that was �??spontaneous, as in the classical capitalist pattern�?? (as a later history put it), preferring instead development �??consciously achieved through state planning.�??... Third, these economists grew to believe that the most important factor in reducing poverty was the amount of money invested in the tools to do so. After all, if there were simply too many people, they reasoned, the binding constraint on growth must be the lack of physical equipment... Fourth, the collapse of international trade during the Depression made development economists skeptical about trade as an engine of growth.

When I was 26, I wrote a paper supporting the deregulation of Far East trade barriers. Nearly got thrown out of the London School of Economics. I was young and stupid, and trying to make some noise.

Does "deregulation of trade barriers" mean liberalisation? When would that have been so unpopular? And has anyone ever been "thrown out" of a department for research activities?

What are the best and worst appearances by international economics in popular entertainment?

In a new ECIPE working paper, Iana Dreyer and Brian Hindley take an in-depth look at the agreement's shortcomings that led to the current dispute over multifunction IT products and suggest how governments might bring the ITA up to speed. They say that new negotiations are necessary, though they want the current dispute to play itself out before the settlement panel (in contrast, the EU has perhaps seen negotiations as an alternative to litigation). The panel's ruling regarding product classification might provide a basis for new negotaitions, which Dreyer and Hindley say should ambitiously cover all consumer electronics. I think it is going to be a while before any such negotiations get off the ground, given the current political and economic environment.

[HT: Kevin Palmstein]

Drums 4.8%
Pipes 0%
Milking machines 0%
Swans 1.8%
Geese $.02/kg
Golden rings 5.5%
Calling birds 1.8%
French hens $.02/kg
Turtle doves 1.8%
Partridge 1.8%
Pear tree 0%

Approximately 30% of world trade is locked in at zero tariffs through various European agreements (the European Union treaties and the EEA), another 8% of trade is under zero tariffs locked in through NAFTA, and another 40% involves OECD importers where tariffs are at or very close to bound rates -- i.e. there is no "binding overhang" (except for the OECD share involving food trade outside free trade blocks, which is roughly 2.5% of world trade).

On top of this, the commitments undertaken by China and Taiwan when they joined the WTO also limit their room for protectionist manoeuvres. If we also include Hong Kong and Singapore as "safe" importers (they are traditionally staunch free traders), this leaves around 20% of trade "at risk." This involves Asian importers, Africa, Latin America, OPEC Members, and components of the former Soviet Union... What all this means is that the recent IFPRI study (which has been widely quoted) may greatly overstate the risk of Doha failing. Because of regional and multilateral bindings that really do bind, we will not get a massive unwinding of trade through widespread hikes in applied tariff schedules - unless the EU, NAFTA, and WTO themselves all unwind as well...

We need to devote energy to non-Doha issues in Geneva. These include the risk of rising and excessive use of antidumping, countervailing duty, and safeguard protection; misguided public subsidies (though some of the current ones may be justified on retro-Keynesian grounds); rising protection in the poorest countries; and temptation in the US Congress to violate existing treaty commitments. The WTO members should spend energy on these issues, but the Doha Round is not a critical part of the equation.