Ben Muse warns that Senators Robert Byrd and Sherrod Brown are trying to bring the Byrd amendment back to life.

Alan Beattie has an FT column summarizing what has been said before: the MDGs are bad benchmarks that won’t be met.

– Targets set in 2000 based on a 1990 baseline punish poor performance prior their establishment.
– The expected rate of progress defies previous development experience.
– They facilitate inappropriate cross-country comparisons.
– They are political measures, not economic or development assessments.

India’s FDI inflow may suffer if headlines about a mob killing the CEO of a MNC are anything more than a one-off occurrence.

This news is more than 36 hours old, which is ancient history as the biggest bailout ever unfolds at lightning speed:

In a change from the original proposal sent to Capitol Hill, foreign-based banks with big U.S. operations could qualify for the Treasury Department’s mortgage bailout, according to the fine print of an administration statement Saturday night.

The theory, according to a participant in the negotiations, is that if the goal is to solve a liquidity crisis, it makes no sense to exclude banks that do a lot of lending in the United States.

Treasury Secretary Henry Paulson confirmed the change on ABC’s “This Week,” telling George Stephanopoulos that coverage of foreign-based banks is “a distinction without a difference to the American people.”

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currently in place in the United States were created for another set of international circumstances and are badly outdated.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.

The US-Europe multi-function IT products dispute may never go to a panel if the parties opt for new negotiations, as Peter Mandelson is proposing. But talk (about talking) is cheap.

An amusing guide to the moral content of economic terminology in the popular press from Bluematter, complete with damning juxtapositions:

Foreign direct investment (inbound): Good

Current account deficit: Bad

Trade deficit: Catastrophic

Capital account deficit: Not used. Presumably bad.

Weak national currency: Bad
Exports: Good
Imports: Bad

Last month on Trade Diversion:

A new discussion paper by Antoni Estevadeordal, Caroline Freund, and Emanuel Ornelas says that regional trade deals amongst Latin American countries have been building blocks for multilateral liberalization — “there is strong evidence that preferences induce a faster decline in external tariffs in free trade areas“.

This contrasts with Nuno Limão’s results for the United States and Europe, where “multilateral tariff reductions in PTA goods were smaller than those in similar goods not imported from PTA partners.”

Last week’s Economist:

In fact, the evidence is mixed. One study argues that America cut multilateral tariffs more slowly on goods to which it had extended preferential access. A new analysis reaches the opposite conclusion for Latin America. The history of the past two decades suggests the two can coexist. Multilateralism has hardly been moribund as regional deals have mushroomed. The Uruguay round of global trade talks ended, the WTO came into being and the Doha round began.

You read it here (with citations!) first.

Richard N. Cooper defends global imbalances in the JEP:

I argue that the generally rising U.S. trade deficit over the last 10-15 years is a natural outcome of two important forces in the world economy — globalization of financial markets and demographic change — and therefore that the U.S. current account deficit is likely to remain large for at least a decade. In a globalized market, the United States has a comparative advantage in producing marketable securities and in exchanging low-risk debt for higher-risk equity. It is not surprising that savers around the world want to put a growing portion of their savings into the U.S. economy. I argue that serious efforts to reduce the U.S. deficit, even collaborative efforts with other countries, may well precipitate a financial crisis and an economic downturn every bit as severe as the one that many fear could result from a disorderly market adjustment to the trade deficit.

While Martin Feldstein disagrees:

I believe that such enormous deficits cannot continue and will decline significantly in the coming years. This paper discusses the reasons for that decline and the changes that are needed in the U.S. saving rate and in the value of the dollar to bring it about. Reducing the U.S. current account deficit does not require action by the U.S. government or by the governments of America’s trading partners. Market forces alone will cause the U.S. trade deficit to decline further. In practice, however, changes in government policies at home and abroad may lead to faster reductions in the U.S. trade deficit.

Samuel Kortum and Jonathan Eaton are writing a book titled Technology in the Global Economy: A Framework for Quantitative Analysis. Chapters two through six are available online as pdfs.