An entire book on The Development and Testing of Heckscher-Ohlin Trade Models.

The Princeton IES Summer Workshop in Trade finished yesterday. You can find all the workshop’s papers, which are largely preliminary drafts of works-in-progress with some marked “do not cite” or “do not circulate”, on their website.

The Wikipedia entry on NAFTA’s impact on US employment really ought to mention the “none at all” position.

Oh, dear. Does the demand curve for visiting the US slope downwards? To fund tourism promotion, the US government will charge foreign travelers coming from more than 30 countries (including most of the OECD) a $10 fee to enter the US. Another petty annoyance for the inframarginal traveler.

[HT: Hit & Run, Patterico]

Dani Rodrik says that developing countries’ policies should promote exportables, not exports.

In “International Trade and Labor Income Risk in the United States,”  Pravin Krishna and Mine Zeynep Senses tackle a topic that has received a lot of attention in the policy arena but, as far as I know, not been subject to extensive empirical assessment. They “find import penetration to have a statistically significant association with labor income risk in the United States, with economically significant welfare effects.”

They specify an income process with transitory and persistent shocks and then “combine industry-level, time-varying estimates of the persistent component of labor income risk with measures of industry exposure to international trade to estimate the relationship between labor income risk and trade.” Both workers who switch industries and workers in industries with increased import penetration experience higher labor income risk (defined as the variance of unpredictable changes in earnings).

Recently in the FT:

FDI flows to emerging economies nose-dived during the first quarter.

Michael Pettis says that the unsustainability of the US current account deficit implied the unsustainability of the Asian export-driven development model. Unfortunately, policymakers don’t seem to have a transition plan.

Gary Hufbauer and Jeff Schott argue that the United States is undermining the G20 pledge to avoid protectionism because state-level bureaucrats are only spending federal stimulus funds on goods and services provided by US suppliers, violating international procurement agreements.

Many of your favorite trade economists are participating in a Shadow Committee on US Trade Policy organized by Gordon Hanson. It’s a “a non-partisan group of economists with an interest in providing informed opinions about international trade and trade policy. Through this web site and periodic meetings, we will discuss current issues regarding US trade policy in an informal but intellectually rigorous manner.”

We’ll see if the group fills a gap not addressed by existing policy shops working on trade policy.

A recent Pew poll has some odd results. “Trade agreements” are now  popular (44% to 35%), whereas last year, 48% were agaist them (while 35% favored).

Pew reports, support for free trade diminishes when the questioner specifically mentions the words “Nafta” (North American Free Trade Agreement) and “World Trade Organization” in the telephone interview. When the question was asked without the offending words, those polled backed the free-trade deals by a 52% to 34% margin.

It’d be nice to separately assess the effects of mentioning NAFTA or the WTO. Have economists convinced the general public to favor trade (agreements) in the abstract, but people dislike them in practice?

Meena Thiruvengadam reports:

The head of the World Trade Organization is fighting back against the perception that trade has been a major driver of the world’s economic woes.

“At worst, trade has been a mechanism of transmission but surely not the cause of collapse in demand,” WTO Director-General Pascal Lamy said Friday at the Peterson Institute for International Economics.

Who has claimed that “trade has been a major driver of the world’s economic woes”? I haven’t seen anyone say that.