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From Great Depression to Great Recession

Author

Listed:
  • Jaroslav Vanek

    (Department of Economics, Cornell University, USA)

Abstract

As beggar-thy-neighbor policies contributed to the Great Depression, so did Destructive Trade contribute to, if not cause, the Great Recession. At the heart of the argument is the fact that modern policy-makers believe in free trade based on comparative advantage, neglecting the fact that with extremely wide exogenous wage differentials, free trade turns into destructive trade. Second-best type solutions must be sought.

Suggested Citation

  • Jaroslav Vanek, 2011. "From Great Depression to Great Recession," Review of Economics & Finance, Better Advances Press, Canada, vol. 1, pages 43-48, April.
    • Handle: RePEc:bap:journl:110204
    as

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    References listed on IDEAS

    as
    1. R. G. Lipsey & Kelvin Lancaster, 1956. "The General Theory of Second Best," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 24(1), pages 11-32.
    2. Leamer, E.E., 1995. "The Heckscher-Ohlin Model in Theory and Practice," Princeton Studies in International Economics 77, International Economics Section, Departement of Economics Princeton University,.
    3. Wolfgang F. Stolper & Paul A. Samuelson, 1941. "Protection and Real Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 9(1), pages 58-73.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Free trade; Destructive trade; Comparative advantage; Second-best; Great recession;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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