Assorted Links

1. Dani Rodrik continues to impress me by his ideas on benefits of trade. I agree completely to his viewpoint that trade theorists assume many things while advocating benefits of trade.

The theory is all fine but when the implementation of the same comes it has not really worked. Like for instance the theory says opening up trade in developing countries benefits consumers as we get better products.  But is that all? What about the labour that works in those industries. To assume they would relocate to other productive industries is too much of a blond notion.  In developing countries, the labour is generally not very well trained to do other jobs and only know the work related to the industry they have been working on. Plus, most of them have learnt the skills not at some school but from parents/relatives etc. So, it is all the more difficult for them to move to the other industry as mostly stated in textbook economics.

This is not to undermine the theory at all, but to point out the fact that reality is quite different.

Read Alan Blinder’s negative view on Off-shoring. His take is 30 million to 40 million U.S. jobs are potentially offshorable which could have serious consequences for the economy as transition is going to be difficult. His arguments are not really convincing ( and I need to read more on this) but if someone can talk of transition becoming difficult for American workers imagine the plight in developing economies.

2. Take the Rodrik poverty quiz. Very interesting…

3. Longest Bull Run in 80 years!

4. Check out the all new website of Economic and Political Weekly ( a leading journal on Socio-Politico-Economic issues in India). It has become much better and would also feature a blog discussing the top 4 issues in every issue.