I． What effect we know about trade deficit on American economy?
*For the claim that
What must be causing this?
The rule of productivity improvement.
Why you should have no concern about employment when we trade with others.
Why would somebody accept something from me? They must give me something
I give “China” $10, in some ways the money come back to Ameica,
i. Buy American goods $10 (all)/$5 (part),
ii. Buy American Assets- eg. invest in IBM
iii. Buy Italian-spaghetti (then Italians do i. and ii.)
The best thing China can do for the U.S. is “Eating” the money.
It’ll be good if U.S. buy stuff from China and China burns that money. (the value of other money increases)
Follow the goods!
II． 11.18 What is related to the Trade Deficit?
People think U.S. is a good place to invest.
It’s more efficient for China to invest their capital to America, since their opportunity cost is lower (comparative advantage also true in investment)
FDI of U.S. is much larger than that of China
*There’s no such thing as positive or negative trade balance. It’s always zero-sum.
Theory and data all support that trade deficit doesn’t cause problem: the Britain ran great trade deficit, but it was the king of the world
**If domestic savings and investment promotes growth…why not foreign?
III． Buying local
We all know that self-sufficient only cause poverty.
---What is local? You need to trade buttons, cottons to make a “local” suit.
What makes trading with local strangers more virtuous than trading with Chinese?
—what makes somebody “local” ? Toronto vs. New York City The notion is so arbitrary.
How do we determine free trade is really the way to go?
11:43 *Some people argue that the $2 benefit every American get from the trade is less than the $100 loss of every worker.
No comments:
Post a Comment