Devesh Kapur, Pratap Mehta and Arvind Subramanian are unhappy:

Is a liberal international economic order losing intellectual support? Should developing economies be worried? If Larry Summers is the canary in the intellectual mine, his two columns in the Financial Times (April 28 and May 5) suggest that the answers to both questions are yes.

The liberal economic order of the last several decades was premised on two assumptions. First, that the proliferation of prosperity across countries was a good thing. Second, there would be winners and losers but, on balance, a majority of people in both developing and developed countries would benefit. Mr Summers now appears to be questioning both assumptions. He has not stated outright that the proliferation of prosperity is undesirable but his ­columns do suggest that globalisation creates competition for America…

In doing so he, perhaps unwittingly, presents the rise of the poorer parts of the world (whose standards of living are still a fraction of US levels) more as a threat than an opportunity to the US. In effect, globalisation is justified only when it serves American interests.

This apparently nationalist argument is couched in appealing distributional terms…

The problem Mr Summers identifies, the hyper-mobility of capital, was an outcome that he and the US actively promoted… At the US Treasury, Mr Summers was a leading proponent of capital account liberalisation by developing countries. Having swallowed those bitter pills of intellectual property protection and capital mobility as a necessary price for a better future, developing countries are now told that those medicines cause problems that need more – in this case protectionist – medication…

One reading is that Mr Summers’ angst about globalisation is motivated by desire to maintain the environment for the continuing spread of prosperity: a need to tweak the rules – through regulatory harmonisation – to bolster the fraying consensus among the US middle class in favour of globalisation.

But the manner in which his position is framed, the inconsistencies of the arguments across time, the inappropriate transferring of the burden of any response from domestic actions to international ones, and the susceptibility of the proposed remedies to protectionist misuse point to a more alarming prospect for developing countries. The ground is shifting under their feet. They would do well to take notice.

Emmanuel tells us who popularized the word “globalization.”

Emmanuel tells us who popularized the word “globalization.”

An OPEC in rice!? The prime minister of Thailand proposes a cartel.

Ivan Cherkashin, Svetlana Demidova, Susumu Imai, and Kala Krishna got their hands on the 3,032 submissions sent to the Journal of International Economics between 1995 and 2004. The product is a NBER working paper on how the journal operates.

We learn that the acceptance rate is around twenty percent, but falling fast. And non-native English speakers have more difficulty publishing. These interesting tidbits are scattered throughout the paper.

An obvious trend is the decrease in the share of submissions from the authors affiliated with the US universities from 50% in 1995 to 37% in 2004 and a corresponding increase in such number for researchers from the European universities from 12% to 28%, suggesting that at least in International Economics, the US may well be losing ground.

I should note that the bottom line is that the JIE does a pretty good job.

Dean Baker says tax incentives like the Patriot Employer Act can’t stem offshoring:

My reason for saying that the tax code is largely irrelevant to firms’ decisions to move jobs overseas is that any tax preferences tend to be a very small factor in location decisions. Firms ship jobs overseas because they can pay workers $1 an hour, instead of $20 an hour in the U.S. They are some quirks here and there in the tax code that can provide frosting for firms that ship jobs overseas, but there are also quirks that encourage them to keep jobs here.

A new working paper pdf on Christian Broda’s website, joint with John Romalis:

Over the past three decades there has been a spectacular rise in income inequality as measured by
official statistics. In this paper we revisit the distributional consequences of increased imports
from China by looking at the compositional differences in the basket of goods consumed by the
poor and the rich in America. Using household data on non-durable consumption between 1994
and 2005 we document that much of the rise of income inequality has been offset by a relative
decline in the price index of the poor. By relaxing the standard assumptions underlying the
representative agent framework we find that inflation for households in the lowest tenth
percentile of income has been 6 percentage points smaller than inflation for the upper tenth
percentile over this period. The lower inflation at low income levels can be explained by three
factors: 1) The poor consume a higher share of non-durable goods —whose prices have fallen
relative to services over this period; 2) the prices of the set of non-durable goods consumed by
the poor has fallen relative to that of the rich; and 3) a higher proportion of the new goods are
purchased by the poor. We examine the role played by Chinese exports in explaining the lower
inflation of the poor. Since Chinese exports are concentrated in low-quality non-durable products
that are heavily purchased by poorer Americans, we find that about one third of the relative price
drops faced by the poor are associated with rising Chinese imports.

Erm, but that’s “preliminary and incomplete,” so “please don’t circulate” it. (The internet is a funny place.)

[HT: MR]

Nick Kristof tries to sell the US-Colombia PTA:

Critics of the free-trade pact worry that it would hurt American workers. But Colombian goods already enter the U.S. duty-free; what would change is that American exporters would get access to the Colombian market.

(Colombia is pushing hard for the pact not because of any immediate trade benefit but because its duty-free access to the U.S. must be regularly renewed. Businesses are reluctant to invest in flower farms or garment factories unless they know that they will be able to export to the U.S. for many years to come.)

So US workers shouldn’t worry because the PTA won’t increase Colombian exports, but Colombia wants the PTA because it’ll attract investments dedicated to exporting for many years? You can’t have it both ways, Mr Kristof.

“Do Iowa’s first-in-the-nation caucuses cause food riots in Mozambique?” — Will Wilkinson

A student of international trade with a bit of free time really ought to clean up the Wikipedia entry on the gravity model. You might do so by working from the first few pages of gravity for dummies.