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Jeffrey Frankel’s Blog

Protectionism is Nothing New for Republicans

June 16, 2018 — Critics of President Trump’s aggressive trade policy have mostly gotten it right.  His tariffs cause economic damage at home – raising the cost of living for American consumers, hurting industry, and taking foreign sales away from farmers and other exporters.   Moreover the threats have been deployed erratically across trading partners and across time in ways that seem calculated to discourage cooperation with the US and rather to isolate the hitherto leader of the free...

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The “G-6 vs. 1” Summit

June 8, 2018 —  I did an interview today as the G-7 Leaders Summit got underway in Canada. In the video at BNN Bloomberg, I said I thought that if Trump’s tariffs are met with united and calibrated retaliation, he might eventually have to back down. Here are the questions they sent me ahead of time and my responses,   – Q:  Ideally – what do you want to see come from the Group of 7 leaders’ meeting that starts today in Canada? – A: If we were truly talking about an ideal world, one would...

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Trump’s On-Again Off-Again Trade War with China

May 31, 2018 — The Trump Administration on May 29, nine days after having said that the China trade war was “on hold,” flipped the switch back to “on”.  As of now, the White House again plans to move forward by June 15 with plans for 25% tariffs on $50 billion of imports from China.  But the areas where Trump is pushing China the hardest are the ones that make the least sense. To try to ascertain the Trump position on trade at any point in time is like trying to ascertain the position of...

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An Economic Platform for the Democrats

May 27, 2018 — Democrats are gearing up for the November mid-term elections, in which they hope to take back the US House of Representatives.  Candidates are finding that the voters are not necessarily paying close attention to foreign affairs or even Trump scandals, and are more concerned about “pocketbook issues.”   The conventional wisdom still stands:  underlying the shock election of Mr Trump was the worry by the median household that it has been left behind by globalization and...

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Seven reasons China won’t yield in Trump’s trade war

April 20, 2018 — President Trump enacted steel and aluminum tariffs in March, citing national security.  China is the intended target, as most other major suppliers were eventually exempted. On April 2, China retaliated by imposing tariffs on 128 American products (representing about $3 billion of trade), ranging from 15% on fruits to 25% on pork.  Trump on April 3 announced 25% tariffs on another 1300 Chinese products representing some $50 billion of trade, citing forced transfer of US...

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Trump’s Steel Tariffs

March 26, 2018 — Caijing Magazine asked me the following questions about US steel tariffs on 3/14. Do you see trade wars coming or they are already here? Will it be easy for the US to win trade wars as President Trump said? Answer: I see trade wars lurking around the corner.  They are not yet here for sure.  But recent developments are very worrying. Of course it will not be easy for the US to win a trade war.  This is one of the most foolish things Trump has said (and he has said a lot...

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Can Technology Hurt Productivity?

March 22, 2018 —  Declining growth rates in productivity and GDP have been observed in recent years.  A variety of explanations have been offered. The most prominent explanations involve technology.   On the one hand, Robert Gordon (2016) has argued persuasively that we should not expect Information and Communications Technology (ICT) and other technological innovations of recent years to have as big an economic payoff as electricity, the automobile, and other technological revolutions of...

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“Trump Tariffs Will Do Harm, Experts Say”

March 9, 2018 — PBS NewsHour asked some of us six questions about the new tariffs.  My responses appear below.  The others’ are at: “Trump’s tariffs will do more harm than good, experts say,” March 8. PBS: Would President Trump’s proposed tariffs on steel and aluminum imports help create more jobs in the United States, as he argues? JF: The import tariffs are likely to create a few jobs specifically in the US firms that make steel and aluminum. The important point, however, is that such...

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Larry Summers’ Explanation for $ Decline

March 5, 2018 — Why has the dollar fallen since January 2017?   My answer is an economic turnaround in the rest of the world.  Also the level of the dollar remains rather high.  But Larry Summers has a different answer. Many of us started warning in the 1980s that erratic US fiscal and foreign policy would eventually put an end to American exorbitant privilege — that foreigner investors would finally tire of holding ever-greater quantities of dollars. I renewed the prediction when GWB...

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Bogle, Bubbles & the February Market Correction

March 3, 2018 — I am honored that John Bogle has commented on my recent column, ”The February Stock Market Correction.”  In it I repeated my claim that 2017 saw a “bubble” in the #VIX – i.e., a market perception of low risk in US stocks that was unjustified by fundamentals – and I added that the bubble had burst in February. Bogle of course is the genius who made low-cost index #mutualfunds widely available.  His comment & my reply are at Barron’s: “Bogle on Bubbles.”....

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