While Bryan likes The Accidental Theorist, my favorite Krugman book is Pop Internationalism. Here are some choice quotes from a chapter. Pop Internationalism has ratings and 17 reviews. Holly said: I enjoyed this quite a bit. It’s true that it became repetitive at times, but that’s the. “Pop internationalists”–people who speak impressively about international trade figures are the target of this collection of Paul Krugman’s most recent essays.

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Remember good old comparative advantage?

But one of the most important lessons in international economics which you can learn from following Jagdish Bhagwati or reading Against the Tide is that errors rear their heads again and again under guises that historically aware economists will recognize as old hat. The immediate reason is that the composition of domestic spending has shifted away from manufactured goods. Suppose that the United States trades with Japan and that Japan systematically promotes new high-technology industries as they emerge.

Then its standard of living, which depends on its purchasing power over imports as well as domestically produced goods, might actually decline.

Review of Pop Internationalism | Mises Institute

Above all, the country had made an awesome investment in physical capital: The possibility of arbitrage, of shipping goods to wherever they command the highest price, would keep chip prices the same in all countries. Everyone realized, however, that the actual debt relief under the Mexican debt package was fairly small.

By promoting targeted industries, they can in principle escape from this trap. The concern, widely voiced during the s and s, that industrial workers would lose their jobs because of automation is closer to the truth ijternationalism the current preoccupation with a presumed loss of manufacturing jobs because of foreign competition. Still, when the efforts began, researchers were pretty sure about what they would find. It is true that in the early s professional economists became aware that one of the implications of new theories of international trade was a possible role for strategic policies to promote exports in certain industries.

The interrnationalism of real income has slowed almost entirely for domestic reasons. The actual wage rate would depend on demand conditions and the relative size of the economies, but let us simply suppose that the relative wage rate is 3. Real GNP, the conventional standard of economic performance, measures what the output of the economy would be if all prices remained constant.


Many internationslism firms may have laid off workers in the face of competition from abroad, but others have added workers to produce for expanding export markets. Things Add Up In each of these cases, my critics seem to have forgotten the most basic principle of economics: But in fact the overwhelming evidence is that the demand for unskilled workers has fallen not because of a change internationslism what we produce but because of a change in how we produce.

This is a internstionalism thing to pick krguman if you’re interested in economics, have or had a basic understanding of it, and want to reawaken that part of your brain.

As soon as one starts to think in terms of growth accounting, however, one arrives at a crucial insight about the process of economic growth: Just as capitalist growth had been based on growth in both inputs and efficiency, with efficiency the main source of rising per capita income, they expected to find that rapid Soviet growth reflected both rapid input growth and rapid growth in efficiency.

Two broad conclusions emerge. I don’t know about you, but I think this is easily lost in tod I’m almost done with this book, and I’ve really been enjoying it though not speeding through it as it is absolute crap as elliptical trainer fare.

This might be because a change in political conditions makes such investments seem safer or because technology transfer raises the potential productivity of Third World workers once they are equipped with adequate capital.

Intrrnationalism is, the United States may be threatened when South Korea gets better at producing automobiles, not because the United States loses the automobile market, but because higher South Korean wages mean that U. The concluding essays focus on interesting and legitimate economic questions, such as the effects of technological change on society. Today Japan is a high-wage country, and the internayionalism of its competition falls mostly on skill-intensive sectors such as the semiconductor industry.

Pop Internationalism

He asserts that the United States could create five million new jobs in import-competing sectors, and he assumes that all five million jobs represent a net addition to employment. Dominique rated it liked it Aug 12, Internatiknalism external economies depend on the size of the market: As capital continues to accumulate, the rate of return and hence the rate of growth will continue to decline.

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Labor is clearly not the only input in the production of goods, but the assertion that the average real wage rate moves almost one for one with output per worker, that what is good for the United States is good for U. International trade explains only a small part of the decline in the relative importance of manufacturing to the economy. Internal real interest rates were percent before the debt deal, with the payments on internal debt a major source of fiscal pressure; they fell to 5- 10 percent almost immediately.

How much capital has been exported from advanced countries to developing countries? This growth has been passed on in lower consumer prices. But Prestowitz fails to notice that the converse is also true: Between andwhen U. Goods have become cheaper primarily because productivity in manufacturing has grown much faster than in services. A survey by Lawrence Katz reaches the same conclusion. The infant industry argument, mentioned above, is intellectually impeccable.

Mexicans will lament that they are able to compete only on the basis of low wages; Americans will worry that their standard of living will be dragged down by the necessity of competing with cheap Mexican labor. Between and the real compensation of white-collar workers rose, whereas that of blue-collar workers fell. We seem to have concluded that growth in the Third World has almost no adverse effects on the First World.

Consider that story again. This analysis carries two clear empirical implications.

This conventional wisdom holds that foreign competition has eroded the U. If you do read it, poo ring me up so we can discuss. Why, then, has the share of manufacturing declined? To find out more, including how to control cookies, see here: By the time a dozen are on-site, one more may not make that much difference. But it is only when one actually does the quantitative accounting that the astonishing krugkan emerges: That shift, however, raises the demand for skilled workers and reduces that for unskilled workers.