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 Richmans' Trade and Taxes Blog

Recent Economic Research on Effects of Trade
Jesse Richman, 9/4/2012

In a recent posting, Edward Alden notes that economists views of the effect of trade on U.S. employment, income inequality, etc., are shifting.  It's worth taking a look at, especially the first part.  Some selections:

"Responding to The Times’s recent survey about the causes of income stagnation, many top economists have cited globalization as a leading cause."

"In “The Evolving Structure of the American Economy and the Employment Challenge,” the Nobel-winning economist Michael Spence looked at job growth from 1990 to 2008 in sectors of the United States economy. He found almost no net job growth in sectors, like manufacturing, in which global trade played a large role. Nearly all of the net gains occurred in sectors in which trade plays a minor role. Government and health care, in which trade plays almost no role, accounted for more than 40 percent of all new jobs."

"Manufacturing output in the United States is no longer growing as rapidly as it once was (and as you would expect if technology had simply been replacing workers in factories). Real manufacturing output grew just 15 percent in the 2000s, compared with more than 35 percent in each of the 1970s and 1980s and more than 50 percent in the 1990s. And one sector where the statistics are of dubious meaning — computers and electronics – accounts for almost all of the recent gains. In 13 of 19 manufacturing sectors, real output declined over the last decade, in some industries quite sharply."

To read the entire piece go to: http://economix.blogs.nytimes.com/2012/08/29/changing-views-of-globalizations-impact/

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