need help with these economics questions. 3. These questions come from an articl
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Question
need help with these economics questions.
3. These questions come from an article “Making Depressions Great Again” which appeared in the WSJ (February 2016).
(a) Why does the author suggest a trade war is approaching? ($2,000)
(b) What implications would a trade war have for the global economy? ($2,000)
4. These questions come from an article “Making the Case for Trade” which appeared in the WSJ (March 2016).
(a) Why do the four leading presidential candidates oppose free trade? ($2,000)
(b) The author outlines three benefits of free trade. Summarize each benefit in 4-6 lines. ($2,000)
5. These questions come from an article “What Donald trump Doesn’t Understand About the Deal” which appeared in the NY Times (March 2016).
(a) How does Donald Trump’s view of trade contrast with the principles of trade as taught in this course? ($2,000)
(b) The author describes Donald Trump as a rent seeker. What is meant by this term? How does ‘rent seeking’ define Trump’s view of trade? ($2,000)
Explanation / Answer
a)
In the article “Making Depressions Great Again”, the author talks about how trade growth and volumes have shown a declining trend, post the Great depression of 2009. It has shown that for an economy to grow progressively, trade growth should be higher than the growth in Real GDP. But, the trends have reversed post the 2009 financial crisis, and trade growth has fallen from 12% to 3%. This poses a serious problem for the economy and thus the need of the hour is to engage in ‘trade wars’ or aggressive trading practices, even if that involves devaluating currency or reprisal of tariffs etc., in order to save the economy from another crisis.
b)
Although posed as a necessary requirement to save the us economy, if all the countries around the world would engage in trade wars, everyone would start losing out, as suppliers would outpace the demanders, pulling the world economy to a slump overall.
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