The bloggingheads exchange between Peter Singer and Tyler Cowen is brilliant.
Author Archives: jdingel
Dead Aid
Out this week is Dead Aid
The aid money pouring into Africa, she says, underwrites brutal and corrupt regimes; it stifles investment; and it leads to higher rates of poverty — all of which, in turn, creates a demand for yet more aid. Africa, Ms. Moyo notes, seems hopelessly trapped in this spiral, and she wants to see it break free. Over the past 30 years, she says, the most aid-dependent countries in Africa have experienced economic contraction averaging 0.2% a year. [WSJ book review]
The Wall Street Journal published an excerpt (the book’s preface) this morning, but that passage doesn’t even begin to make the anti-aid argument. But Bill Easterly is excited about the book, so it’s probably worth a closer look.
Update: See this (negative) review. Thanks to Luis Enrique in the comments for the pointer.
Free trade petition
Tom Palmer, director of the Atlas Global Initiative for Free Trade, Peace, and Prosperity, is collecting signatures for a petition in support of free trade that will be unveiled shortly before the G20 summit in London.
Who benefits from ag subsidies?
“Using a complementary set of policy quasi experiments, I find that farmers who rent the land they cultivate capture 75 percent of the subsidy, leaving just 25 percent for landowners.” – Barrett E. Kirwan
Are you playing the H-1B lottery?
Applying for an H-1B visa is entering a lottery – there’s about a one-third probability that you’ll be welcome to work in America, courtesy of a random lottery run by the US government. Michael Clemens wants to study the difference between winning and losing – if you’re applying for a new H-1B this year, get in touch with him.
HT: Wilkinson
Thinking big: The gains from immigration
- The gain from a lifetime of microcredit is the same as 8 weeks working in the USA
- Total annual gain to Grameen Bank borrowers (around) $30 million
- If I get 3,000 Bangladeshi workers into the US, do I get a Nobel Peace Prize?
Hat tip: Wilkinson
Offshoring to your next door neighbor
Wolfgang Keller and Stephen Yeaple: There is “a clear negative relationship between the sales of US multinational affiliates and the trade costs (physical and policy barriers) from the US. In addition to the usual gravity finding – larger markets attract more sales – Figure 1 indicates that offshoring is helped by geographic proximity.”
Mexican trucks and NAFTA obligations
The Mexican government said Monday it would slap tariffs on 90 U.S. industrial and agricultural products, in a trade dispute that underscored the difficulties facing President Barack Obama as he tries to assure business and global allies that he favors free trade.
Mexico said the tariffs were in retaliation for the cancellation of a pilot program allowing Mexican trucks to transport cargo throughout the U.S.
Unions have for years fought to keep Mexican trucks off U.S. highways, despite longstanding agreements by the two countries to eventually allow their passage. Legislation killing the pilot program was included in a $410 billion spending bill Mr. Obama signed last week.
Tidbits
- Language as a trade barrier – “[I]f knowledge of English in all European countries increased by ten percentage points, European trade would rise by up to 15% on average. Bringing all European countries up to the level of English proficiency enjoyed by the Dutch could increase European trade by up to 70%.”
- The third edition of Doug Irwin‘s Free Trade Under Fire will be out in a few months.
- Foreign athletes can now play in the US for more than ten years.
- Robert Baldwin criticizes the botched special safeguard mechanism that caused so much trouble for the Doha negotiations back in July.
- The benefits of highly skilled immigration: “If immigrants were merely displacing natives, increases in the H-1B quota should not have led to increases in innovation. But Messrs Kerr and Lincoln found that when the federal government increased the number of people allowed in under the programme by 10%, total patenting increased by around 2% in the short run. This was driven mainly by more patenting by immigrant scientists. But even patenting by native scientists increased slightly, rather than decreasing as proponents of crowding out would have predicted.”
Financial crisis and manufacturing exports
Mark Koyama notes that manufacturing-driven economies are being hit pretty hard by the financial crisis:
Countries which retained significant manufacturing industries like Germany and particularly Japan are currently suffering the most – even though their banks were cautiously managed unlike much of the Anglo-American financial sector. Japan’s GDP shrunk at an annualized rate of 12.7 percent last quarter which more or less wipes out the growth that took place between 2003 and 2007. Since it is very easy to defer purchasing a new mp3 player or car, while expenditures on services are harder to cut back on, the bulk of the fall in aggregate demand has manifest itself in terms of falling demand for manufactured products. Development economists in the 1960s used to advice developing countries that it was dangerous to specialize in a single cash crop like coffee despite what comparative advantage might say because it would leave the entire economy dependent on movements in global prices. Now it appears that economies that have specialized in exporting manufactured are peculiarly vulnerable in a world where globalization has meant that economic shocks are tightly correlated across countries.
Trade Diversion 