Author Archives: jdingel

Eichengreen: Dollar is headed down

Barry Eichengreen agrees with Ken Rogoff:

The dollar’s strength reflects the knee-jerk reaction of investors rushing into US treasuries as a safe haven. It is worth remembering that the same thing happened in August 2007, when the sub-prime crisis erupted. But once investors realized the extent of US financial problems, the rush into treasuries subsided, and the dollar resumed its decline. Now, as investors recall the extent of US financial problems, we will again see the dollar resume its decline.

Hat tip to Thoma.

Who saw the Doha collapse coming?

Benjamin Cohen asks:

By ignoring the role of politics, economists often get it wrong. How many trade specialists were prepared for the recent breakdown of the Doha trade talks, despite the obvious gains to be had on all sides from a new round of liberalisation?

The answer is almost everyone (Jagdish Bhagwati’s strategic optimism notwithstanding). Trade specialists are (sadly) well aware of the political constraints that shape trade policy.

Bleg: Trade openness and labor market churn

Randall Soderquist chides Fred Bergsten for urging trade liberalization without a complete package of social policies:

A viable vision for the future would recognize that the programs currently in place in the United States were created for another set of international circumstances and are badly outdated. Innovative policies that mitigate the uncertainty and insecurity that come with constant change and create the foundation for economic growth must be pursued. This includes funding and implementing policies that protect workers from the process of “creative destruction” that is now an inevitable component of our lives.

How much of this greater uncertainty has been induced by globalisation? Can someone point me to empirical literature on the relationship between exposure to international competition and labor market churn? Google Scholar isn’t turning up immediately obvious results.

That oddly strong dollar

Ken Rogoff says that the dollar should be diving during this financial turmoil.

But can this extraordinary vote of confidence in the dollar last? Perhaps, but as investors step back and look at the deep wounds of America’s flagship financial sector, the public and private sector’s massive borrowing needs, and the looming uncertainty of the November presidential elections, it is hard to believe that the dollar will continue to stand its ground as the crisis continues to deepen and unfold.

Seriously, how did we go from $2/£1 at the end of July to $1.75/£1 last week?

Exports that don’t cross borders

Deemed exports:

Most companies recognize that U.S. export control laws apply to shipments of products or technical data out of the United States to another country. Despite recent efforts by the U.S. Department of Commerce to increase awareness about how the export control rules apply to other transactions, however, some companies still do not realize that the sharing of technology or source code with a foreign national is also an export – even when the foreign national is within the United States. Under the “deemed export rule” in the Export Administration Regulations (EAR), a transfer of technology or source code (except encryption source code) is “deemed” to be “an export to the home country or countries of the foreign national.”

Update: Professors take note!

[Hat tip: Sabrina]