Commemorating 1,028 economists’ futile opposition to the Smoot-Hawley tariff in 1930, the Club for Growth gathered 1,028 economists’ signatures to oppose Congressional momentum towards imposing punitive tariffs on China:

We, the undersigned, have serious concerns about the recent protectionist sentiments coming from Congress, especially with regards to China…
By the end of this year, China will most likely be the United States’ second largest trading partner… This marvelous growth has led to more affordable goods, higher productivity, strong job growth, and a higher standard of living for both countries. These economic benefits were made possible in large part because both China and the United States embraced freer trade…
We urge Congress to discard any plans for increased protectionism, and instead urge lawmakers to work towards fostering stronger global economic ties through free trade.

Some big names, including award winners like Acemoglu, Kydland, Prescott, Schelling, and (Vernon) Smith, signed up. Here are the signatories that I know are trade economists:

James Anderson, Robert Baldwin, Scott Bradford, Alan Deardorff, Barry Eichengreen, Rob Feenstra, Monty Graham, Giovanni Maggi, Keith Maskus, Arvind Panagariya, Andres Rodriguez-Clare, Andrew Rose, Esteban Rossi-Hansberg, Robert Staiger, Patricia Tovar, Romain Wacziarg.

Now obviously I don’t know that many trade economists, so numerous names on the list likely belong to people working in the field, but nonetheless, there are a number of conspicuous absences. Where are opinion leaders like Bhagwati and Bergsten? Senior trade guys like Srinivasan? Theorists like Eaton, Kortum, Melitz? Empiricists like Bernard, Jensen, Redding & Schott? Did someone forget to call Doug Irwin and Razeen Sally? Did Greg Mankiw fail to pass the pen & paper to Robert Z. Lawrence and Jeffrey A. Frankel?

I don’t know the political leanings or particular policy views of many of those economists, but I expected at least some of them to be on the list. If I’m right that trade economists appear to be underrepresented given that it’s an anti-tariff petition, what might explain it?

Some economists are more comfortable appearing in Econometrica than the WSJ. Perhaps theorists prefer to avoid policy recommendations or don’t want their views reduced to a few paragraphs appearing in a large print ad. Those that excel in model building or statistical analysis may not care for public debate. Moreover, commenting on such an issue is unlikely to aid one’s professional advancement, but it can make enemies.

The Club for Growth’s network exhausted the 1028 places. Perhaps the petition’s signature gatherers were more concerned with finding one thousand signatories than the prestige or research area of the economist. Maybe they started with the Club for Growth’s ideological allies (all of George Mason seems to have signed) and wound up filling the 1028 places before having contacted all notable trade economists. [On this point, obviously there are far more economists alive today than in 1930. Why didn’t the Club for Growth adjust for academic population growth? :)]

Trade economists disagree with Ec 10 lessons about trade. Although the lesson in Econ 101 is that trade is good and protection is bad, perhaps those who actually study the subject learn that protectionism can improve an economy and are less likely to support free trade than the average non-trade economist. [Okay, we know that claim isn’t true. But maybe trade economists are aware of all of the nuances of trade theory and prefer to not boil the subject down to a petition headline.]

Some prefer not to associate with the Club for Growth. The group is activist, not academic, and viewed by some as a bunch of lobbyists wed to Republicans, or at least that’s the vibe from Brad DeLong. That might also explain Paul Krugman’s absence.

Is anyone else surprised at the shortage of trade economists signing a trade petition? If so, can you explain it?

[HT: Drezner, Kling, and Mankiw, who all signed.]

Two apparently contrasting claims:

“Since lowering import barriers typically exerts a downward pressure on prices, evolving trade liberalisation represents a structural break from the inflation forecasting perspective.” – Aron & Muellbauer

“Inflation isn’t transmitted via spores in the air. It’s a monetary phenomenon, and as such, starts and ends on native shores.” – Caroline Baum

I believe Mark Thoma succeeds in reconciling them:

[W]hether or not the movement of prices from one level to another in response to shocks should be called inflation is a matter of definition, some monetary economists reserve the term inflation for a continual run-up in the price level, not a one-time change to a new level, but whatever such movements in prices are called there’s still a role for central banks to play in response to shocks that cause short-run movements in the price level.

What does Dani Rodrik think of this?

China will curb exports of cheap labor-intensive products to force manufacturers into making higher-quality goods… The Ministry of Commerce will expand its catalogue of processed goods subject to export limits in the second half of 2007… Manufacturers can be exempted from the exports limit if they shift their production to inland provinces including Shaanxi, Xinjiang and Gansu further away from the Chinese coast, part of a plan by the government to close the income gap between the wealthy coastal cities and the interior.

[HT: Setser]

Martin Wolf has plenty of kind words for Erik Reinert and Ha-Joon Chang, but he’s critical too:

Reinert argues: “US industrial policy from 1820 to 1900 is probably the best example for Third World countries to follow today until these countries are ready to benefit from international trade.”… Yet this example makes no sense for most, if not all, contemporary developing countries. The technological gap between the UK and the US in the 19th century was trivial by comparison with that between, say, the US and Ethiopia today. Even so it took more than half a century for the US to close it.

The US was also a vast continental country, capable of attracting a huge immigrant workforce, much of it educated, and so generate a domestic market large enough to exhaust the economies of scale offered by the technology of the time, while still permitting strong domestic competition. That proved not to be the case even for India, a giant among developing countries. This is, to put it mildly, hardly a model for Ethiopia, let alone Chad.

Few (I would argue, no) contemporary developing countries are big or technologically sophisticated enough to make a decent job of the 19th-century protectionist model.

Moreover, as Douglas Irwin noted in reviewing Chang’s previous book:

[T]he United States started out as a very wealth country with a high literacy rate, widely distributed land ownership, stable government and competitive political institutions that largely guaranteed the security of private property, a large internal market with free trade in goods and free labor mobility across regions, etc. Given these overwhelmingly favorable conditions, even very inefficient trade policies could not have prevented economic advances from taking place.

Nonetheless, Wolf concurs with the globalization dissidents that developing countries ought to have the freedom to err (“policy space” as they say, to explore potentially constructive forms of protectionism). In some areas, such as intellectual property, this is the professional consensus and the only disagreement comes from industry lobbyists. In other areas, the debate will rage on.

Another earthquake in Asia, another test of its implications for the global supply chain. Japan’s quake last week was not as troublesome as Taiwan’s in December, but it did paralyze Toyota’s plants for 36 hours.

Greg Mankiw asks easy questions:

Congress is about to consider expanding Trade Adjustment Assistance, according to the Washington Post. I have two questions about the program:

Can you really tell whether worker is losing his job due to trade or due to other forces, such as technological change?

Is a worker who loses a job due to trade deserving of a more generous safety net than a worker who loses his job due to other forces, such as technological change?

Attacking from the other side, Dean Baker makes the fair point that TAA is more political grease than economic compensation:

[W]orkers who lose their job directly due to trade are a small minority of the workers who are harmed by trade. The vast majority of workers who are harmed by trade are workers who earn lower wages as a result of the patterns of trade promoted by recent trade agreements. These are disproportionately workers who do not have college degrees. The proposals for trade adjustment assistance do nothing to help these workers.

Alex Tabarrok is probably comfortable with that expediency.

Viewing globalisation as an overwhelmingly negative force, citizens of rich countries are looking to governments to cushion the blows they perceive have come from the liberalisation of their economies to trade with emerging countries.

Those polled in Britain, France, the US and Spain were about three times more likely to say globalisation was having a negative rather than a positive effect on their countries. The majority was smaller in Germany, with its large export base.

See the FT article for detailed poll results.

Viewing globalisation as an overwhelmingly negative force, citizens of rich countries are looking to governments to cushion the blows they perceive have come from the liberalisation of their economies to trade with emerging countries.

Those polled in Britain, France, the US and Spain were about three times more likely to say globalisation was having a negative rather than a positive effect on their countries. The majority was smaller in Germany, with its large export base.

See the FT article for detailed poll results.

Viewing globalisation as an overwhelmingly negative force, citizens of rich countries are looking to governments to cushion the blows they perceive have come from the liberalisation of their economies to trade with emerging countries.

Those polled in Britain, France, the US and Spain were about three times more likely to say globalisation was having a negative rather than a positive effect on their countries. The majority was smaller in Germany, with its large export base.

See the FT article for detailed poll results.

Some free traders like to challenge industrial policy advocates by asking – “if tariffs are so great, doesn’t the Interstate Commerce Clause impede Tennessee’s economic development?” Dani Rodrik explains why the 50 states aren’t merely the world’s most successful free trade area.