Monday, December 5, 2016

WOW: Paul Krugman Does a Dance on Trumps Trade and Mfg. Employment Losses Theory

P. Krugman writes:
America used to be a nation where a lot of people worked in manufacturing. Today, we
basically work in office parks and services. But people aren’t reconciled to the change; and 🍌(I’m using that symbol for the man who will use the Oval Office to turn us into a banana republic) is promising to bring the jobs back by punishing companies who move jobs abroad.

Most economists will tell you that this is completely unrealistic. But in conversations with various fairly sophisticated people, I’ve realized that there’s a widespread impression of major disagreement within the field. The notion – fed, it has to be said, by some misleading statements by economists themselves – seems to be that new work on the impacts of trade refutes the notion that the decline of manufacturing is basically about productivity. So I’ve been sitting down with recent work, and realized that there’s actually very little disagreement about either the facts or the counterfactuals – that is, what might have happened with different trade policies.
The full essay is here.

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