Off on a final math. trip to complete some work started in 1994; noting the following links for future reference. There are recently interesting discussions in blogs by American Economists. and vigorous comments. I have barely followed the discussions, but felt that there was unusual candour after Dani Rodrik’s entry. I do not know the political or other allegiances of the various economists. Many seem to be well-known economists(?) and in Round one probably divided along the main American political lines.
Round 1
Prominent economists discus supply side economics (in USA) and do not seem to agree on what happened and how. Links at the end of a Mark Thoma post
Round 2
Daniel Drezner on Dani Rodrik’s entry in to the blogosphere . Continuation and links in various places including Economist’s View.
Discussion on whether free trade lowers ‘prices’.Rodrik summarizes :
Trade and prices: an attempted summary
Can we all agree on these?
1 Trade policy works through its effect on the relative prices of goods, not through the price level.
2 Depending on what side of the change in relative prices they find themselves, any specific group of consumers or producers can be made worse off by a move to free trade.
3 A corollary: there is no guarantee that free trade raises real wages.
4 The Carlos Diaz-Alejandro rule: For almost any particular conclusion you want to arrive at, there is some economic model that will take you there.
5 Throw in some scale economies (dynamic or otherwise), and then just about anything can happen (including free trade making some countries worse off).
6 The positive spin: This does not diminish the value of economic modeling; it simply means we have to be more careful with generalizations and be more explicit about the assumptions that lie behind our reasoning.
7 Bottom line: It is possible to have an illuminating (sometimes), intelligent (mostly), and entertaining (almost always) economic debate in the blogosphere.
See also the list on page 13 of
Growth Strategies. Excerpts: “A key theme in these works, as well as in the present paper, is that growth-promoting policies tend to be context specific.
…
The paper revolves around two key arguments. One is that neoclassical economic analysis is a lot more flexible than its practitioners in the policy domain have generally given it credit. In particular, first-order economic principles—protection of property rights, contract enforcement, market-based competition, appropriate incentives, sound money, debt sustainability—do not map into unique policy packages. Good institutions are those that deliver these first-order principles effectively. There is no unique correspondence between the functions that good institutions perform and the form that such institutions take. Reformers have substantial room for creatively packaging these principles into institutional designs that are sensitive to local constraints and take advantage of local opportunities. Successful countries are those that have used this room wisely.
The second argument is that igniting economic growth and sustaining it are somewhat different enterprises. The former generally requires a limited range of (often unconventional) reforms that need not overly tax the institutional capacity of the economy. The latter challenge is in many ways harder, as it requires constructing a sound institutional underpinning to maintain productive dynamism and endow the economy with resilience to shocks over the longer term.” A shorter paper by Dani Rodrik on the same theme. Round 2 blurs in to
Round 3
Mark Thoma discusses the benefits of international trade (mainly for USA) and Rodrik’s response is summarized in“ The Globalization numbers Game” . Many comments indicate skepticism about the quantity of benefits to USA now, but this may NOT apply to other countries.
Some comments from other economists so far:
Angry Bear and maxspeak
Why should we bother about the discussions in USA?
This paper by Marion Fourcade starts with “This article relies on an analysis of the institutionalization of economics worldwide during the 20th century to argue that the logic of professional development in this particular field has come to be increasingly defined in global terms. “ and concludes “Global jurisdictions, then, constitute an essential source of legitimacy and resources for “core” economists, too. Since the more peripheral places of the world economy are more vulnerable to the professional influence of economists (both local and foreign), they, in fact, constitute a fundamental space where individual experts and organizations fight key intellectual and jurisdictional battles through the ongoing economic reconstruction of societies—a process that is not, and never will be, settled.”
