Category: International Trade

Protection Does Not Create Jobs

My wife keeps getting e-mails forwarded by her friends urging everybody to buy American to keep our jobs at home. Some have suggested giving gift cards for services rather than merchandize on the grounds that most merchandize is made in China. I’ve resisted the temptation to dictate a response for her to send to her […]

Pay Now or Pay Later

Someone recently asked me whether I thought the taxpayers would be willing to pay to clean up our fiscal mess. From a political perspective, I doubt that they will be willing to pay enough to convert the fiscal deficits into surpluses, which is necessary to reduce the level of debt. Since public awareness is probably […]

Exports Make Better Jobs, But Not Necessarily More Jobs

Much has been made of the increase in exports last year and the jobs exports create. The President has announced a goal of doubling exports by 2014.  Coming off a depressed level, U.S. exports rose nearly 17 percent in 2010 to $1.8 trillion. At year end, exports increased $2.8 billion from November to December. The […]

It’s All Ben’s Fault

Well, I guess it’s semi-official now. The demonstrations in Egypt were caused by Ben Bernanke’s monetary policy. I heard it once, and my jaw dropped. Then, I heard it again. Now, it’s commonplace. What can I say? I’ve wondered about “black box economics” lately, but this one really has me perplexed. What is the causation? […]

The Trade Deficit Widens, As It Must

It was announced today that the goods and services trade deficit widened to $40.29 billion in April with both exports and imports declining. The decline in exports and imports is a sign of a weak or weakening world economy. The arithmetic, however, makes our growing trade deficit inevitable as long as our budget deficit is […]

Currency Manipulation

The Dollar and the Yuan   With Alice in Wonderland back on the screen, I guess it’s okay to make up the meaning of words. When I started at the Richmond Fed in August 1968, what they are now calling currency manipulation was the standard, accepted international monetary system. It was set up at Bretton […]

Jobs Jobs Jobs – Trade Trade Trade

Warning: In terms of the title, I’m about to bury my lead. Either be patient, or jump ahead. Yesterday my dentist asked me if there was a short and sweet book I could recommend to him that would help him establish a framework for his thinking on matters economic. He thought he had good instincts […]

The U.S. Trade Deficit Increases: Alternative Explanations

The goods and services trade deficit widened in September, reversing recent improvements. It was good news that both imports and exports increased after a shrinkage of trade resulting from the global contraction. The deficit increased because imports increased more than exports. Exports or goods and services increased by $3.7 billion to $132.0 billion while imports […]

The Dollar: Beggar My Neighbor, or Myself?

The headline in today’s Wall Street Journal says “World Tries to Buck Up the Dollar.” The headline writer no doubt savored the opportunity to use “buck” for its double meaning even though it might have been more accurate to say “World Tries to Hold Down It’s Currencies.” That would have gotten closer to the world’s […]

Dollars and Books Revisited

As now, the dollar was in general decline against some currencies during September 2007. The Euro was strong against the dollar; the British pound reached $2 per pound and the Canadian dollar reached 1 to 1 parity with the dollar. I have always kept track of the U.S./Canadian dollars by comparing the two prices inside […]