Tuesday , October 24 2017
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Dani Rodrik’s weblog

Why Did So Many Cheer Turkey’s Democracy While It Was Dying?

Claire Berlinski’s excellent account of the Western (and domestic) observers who cheered on as Turkey was sliding into authoritarianism reminds me of a point I long wanted to make. There was in Erdogan’s early years some reason to be confused as to what was going on. Was he a Muslim democrat who was essentially the Turkish equivalent of a European Christian Democrat? Or was he an authoritarian at heart who would resort to repression as soon as he had sufficient control? We know the answer...

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Prudential regulation, capital controls, and second-best

A usual argument against the use of capital controls as a prudential measure is that it is always better to tackle problems at their source rather than trying to deal with symptoms.  This is called the principle of economic targeting in Economics, one of the discipline’s most powerful teachings. The problem with indirect remedies is that they create problems themselves, “by-product distortions” in Econ-speak. With capital controls, those would be corruption and the discouragement of trade...

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Trade, redistribution, and social dumping

I just saw this response from Joel Trachtman to my column "Too Late To Compensate Free Trade's Losers." Trachtman argues that "the fundamental problem of winners and losers will not be solved by these changes." I do not disagree. But the fundamental political problem with trade is not there are winners and losers -- the domestic market generates much greater job churn and dislocation than trade does. It is that it generates unfair redistribution, or at least redistribution that can be...

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Dismal thoughts about the Turkish referendum

I don’t write a lot on Turkey these days. (My latest piece was published last September. It was on Erdogan’s missed opportunities to enter history books as a truly great leader, rather than the corrupt tyrant he seems destined for.) It’s partly because the subject is too depressing: try hard as I might, I really cannot find a good scenario developing over the years ahead. It’s also because conventional wisdom has so thoroughly converged on what I have been saying since I first began to...

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Ariel Rubinstein on Economics Rules

The great Ariel Rubinstein has a review of my book Economics Rules in the latest issue of the Journal of Economic Literature. It is a fun review – gratifying for me because Ariel agrees with many of my arguments – and it has a deeply personal, even emotional, feel to it. Ariel feels strongly about the turn the profession has taken, and agree or not, the essay makes for a very interesting read. The review took me back to my graduate-student days at Princeton. The place had a very strong...

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A Foreword to Kari Polanyi Levitt

I was recently asked to write a foreword to the Mexican edition of Kari Polanyi Levitt’s From the Great Transformation to the Great Financialization. Kari is Karl Polanyi's daughter, and the essays in her book -- part memoir, part intellectual history, part analysis of the global economy -- provide a wonderful Polanyi-esque perspective on our day. I happily accepted, and my Foreword is below. **** I first encountered Karl Polanyi as an undergraduate, in a course on comparative politics....

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Thinking straight about fair trade

In the previous entry, I discussed the real-world distributional effects of trade agreements, in the specific case of NAFTA. Why should we care about such redistribution and how should we deal with it? It is useful to distinguish between two different versions of an argument as to why trade may be problematic from a social or political perspective. Trade is problematic because it redistributes income. Trade is problematic because it violates norms and understandings embodied in our...

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What did NAFTA really do?

Brad De Long has written a lengthy essay that defends NAFTA (and other trade deals) from the charge that they are responsible for the loss of manufacturing jobs in the U.S. I agree with much that he says – in particular with the points that the decline in manufacturing employment has been a long-term process that predates NAFTA and the China shock and that it is driven mainly by the secular trend of labor-saving technological progress. There is no way you can hold NAFTA responsible for...

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New results on structural change during the recent growth boom in developing countries

The last two decades have been a rare period of rapid convergence for the world's developing economies. Everyone is familiar with China and India's experience, but growth went beyond these two large economies. Many countries in Sub-Saharan Africa and Latin America had their best performance in decades, if not ever. In a new paper, my co-authors Xinshen Diao (IFPRI) and Margaret McMillan (Tufts and IFPRI) and I examine this experience. We ask what drove this growth and how sustainable is...

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