The Trade Agreement Embarrassment, Second Version
AbstractThe dominant academic literature about trade agreements maintains that they are only about national terms-of-trade manipulation and not at all about purely political concerns. Non-academic economists, commentators, and diplomats by contrast think that trade agreements are all about political concerns. There are two substantive and important distinctions between the two views. i Practitioners maintain that policymakers care virtually not at all about the terms of trade or about trade-tax revenue ii Practitioners, unlike academics, maintain that trade-agreement negotiations themselves change the underlying political economy. Observation of actual trade policy measures, though not conclusive, suggests that the practitioners are right and that the academics are wrong.
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Bibliographic InfoPaper provided by Penn Institute for Economic Research, Department of Economics, University of Pennsylvania in its series PIER Working Paper Archive with number 13-049.
Length: 20 pages
Date of creation: 27 May 2013
Date of revision: 02 Sep 2013
Multilateralism; Standard Academic Model; Practitioners’ Conventional Wisdom; terms of trade; political economy;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-13 (All new papers)
- NEP-INT-2013-09-13 (International Trade)
- NEP-PKE-2013-09-13 (Post Keynesian Economics)
- NEP-POL-2013-09-13 (Positive Political Economics)
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