POLI 441 Lecture Notes - Lecture 20: Putting-Out System, U.S. Bancorp, General Equilibrium Theory
23 Oct 2018
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Document Summary
Trefler 2004, 1989 cusfta raised canada"s manufacturing labour productivity by 6% long term but raised level of unemployment in canada for 3 years while overall econ grew: consumption side effects, we know trade lowers prices on average. And the bias is pro-poor, poor consumers spend more on traded sectors e. g. food while rich consumers spend more on non- traded sectors: pro-poor effect especially high in developed countries because poor consume more non-comparative advantage products. For canada poor households buying imports like food and textiles: labour side-effects, more ambiguous than consumption. H-o pattern: reallocation of resources: change of demand for skills. Rich countries appear especially affected: decreased demand for low-skill labour: effects analogous to technical change adjustments: think self-driving cars: 3. 5m truck drivers in us. These effects appear greater than anyone expected: challenge: Is there a combination of domestic policies that cushions the adjustment process: stakes are high: pol backlash, populism, rising protectionist sentiment in us case.
