Readings Flashcards
A Flat World, a Level Playing Field, a Small World After All, or None of the Above? A Review of Thomas L. Friedman’s The World is Flat (Edward E. Leamer)
geography limits competition and creates long-term relationships between buyer and seller
geography limits competition since it creates cost-advantaged relationships between sellers and buyers who are located “close” to one another
Friedman is really writing about a small world in which distance, measured physically, linguistically, and culturally, doesn’t isolate your job from competition from far-away workers
trade contributes to the decline in manufacturing jobs but doesn’t seem to be the primary driver
distance effect on trade has not diminished even as transportation costs and communication costs have fallen
physically, culturally, and economically the world is not flat
The China Shock: Learning from Labor-Market Adjustments to Large Changes in Trade (David H. Autor, David Dorn and Gordon H. Hanson)
China’s rise as an opportunity to study the impact of a large trade shock on labor markets in developed economies
idea that after opening up to trade in China, you have decreased wages, greater unemployment domestically in the US but benefits from trade have yet to materialise
trade should affect prevailing wage levels nationally but not employment rates locally or regionally but the shock catalysed significant falls in employment rates within trade-impacted local labour markets
workers’ specific skills cause them to seek positions in which they remain exposed to import competition
country is moving beyond the period of catch up associated with its market transition and becoming a middle-income nation
rapidly rising real wages indicate that the end of cheap labor in China is near
comparative advantage in the future will likely be less about its labor abundance and random initial industry prowesses, and more about the endogenous responses of business and government to the global economic environment
The Happy Few: The Internationalisation of European Firms (Thierry Mayer* and Gianmarco I. P. Ottaviano**)
internationalisation from the point of view of a policymaker refers to the presence of countries in international markets as measured by their shares of exports, imports and FDI
from the point of view of a manager, it refers to the ability of firms to generate value through international operations
international performance of a country is driven by a handful of high-performance firms
aggregate exports are determined by a few top exporters that are relatively big and supply several foreign markets with several differentiated products
only a few firms export a large fraction of their turnover
no clear evidence of firms performing differently after accessing foreign markets
entire effect of the exporting country’s size on trade comes from the number of its exporting firms
“De‐Globalisation? Global Value Chains in the Post‐COVID‐19 Age” (Pol Antràs)
after increase in globalisation, data on trade openness now finds a decrease in exponential growth in international trade
think of the end of hyperglobalisation and more about the slowing down of globalisation (does not mean that globalisation is over)
overall, the 1980s and 1990s period is not comparable since there was an increase in suddenly abundant skilled labour from China, etc.
increasing popular resentment against trade and trade openness and globalisation - protectionist trade policies are well-established in public opinion
trade policies can turn more protectionist than they have been (WTO, Trump with NAFTA/USMCA, etc.)
diplomatic tensions fuelling trade wars and protectionist trade policies, sowing the seeds of de-globalisation
COVID as more transitory than the 2008 financial crisis but long-term effects and diplomatic tensions sustaining anti-globalisation rhetoric
