POLI 441 Lecture Notes - Lecture 18: Dot-Com Bubble, Moral Hazard, World Trade Organization
30 Jan 2018
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It"s difficult to distinguish learning (of judges" preferences, for example) vs. understanding of precedent. In the short-term and medium-term, the adjustment costs are long lasting. Simultaneous rising attention to inequality as social ill: e. g. Trefler (2004): the 1989 cusfta (a sudden and ambitious trade agreement) raised. Real trade and real gdp, 1960 - 2016. In correlational terms, this is what we"re seeing: advanced economies, emes and developing economies, the curve is more abrupt, growing slightly faster than developed economies. Consumption-side effects: we know trade lowers prices on average, the point of trade is to consume. Social and political effects: whe(cid:374) we talk a(cid:271)out the gai(cid:374)s fro(cid:373) trade, that"s assu(cid:373)i(cid:374)g adjustment i. e. , reallocation towards industries that we have a comparative advantage in. If that doesn"t happen for whatever reason, that means that the full gains from trade are not being absorbed: this is what we"re talking, adjustment costs seem especially salient in developed [rich] countries.
