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In a new paper (Artuc et al. 2019a), we answer this question by providing estimates of income gains and inequality costs resulting from unilateral import tariff liberalisation for 54 low- and middle-income developing countries.
Jun 7, 2022 · In summary, free trade will not cause unemployment but a change in the patterns of demand within economies. This will lead to a change in patterns of employment, and there may be transitional unemployment, while workers are switching jobs.
Jan 15, 2015 · Successful trade expansion without projected benefits. As part of his effort to persuade Congress to pass the North American Free Trade agreement in 1993, President Bill Clinton predicted that exports from the United States to Mexico would boom, generating a million U.S. jobs in five years.
- Effects of Trade on Labor Markets
- Effect of Trade on Prices
- Putting Things Together
- Conclusion
How trade affects labor markets depends on how much those markets are exposed to import competition or export opportunities. For firms with exporting opportunities, (such as those producing aircrafts, optical and medical instruments, and soybeans) increased trade can lead to revenue and job growth, while firms that face competition from less expens...
When economists advocate for more open trade, they usually point to lower consumer prices as a major benefit. These price decreases may be less salient to the public than, for example, a plant closure, but the magnitude of the effect can be very large because the benefit is enjoyed by many households. Increased trade leads to lower prices through a...
So far we have presented evidence of two channels that may affect low- and high-income households differently and that work in opposite directions. Labor market effects tend to differentially harm low-income households, but the price effect disproportionately benefits them. On net, how important is each channel? To shed some light on the answer to ...
Economists overwhelmingly view the benefits of trade as outweighing the costs. In this Commentary, we have discussed how trade can affect households differently depending on their position in the labor market and the pattern of their consumption expenditures. The effects from these two channels go in opposite directions: low-skill or low-wage house...
Jan 18, 2017 · But what is the case against free (or at least freer) trade? First and foremost is the argument that it creates losers as well as winners.
Apr 29, 2021 · In this subsection, I will offer a few examples of methodological a priori assumptions in the empirical research on the benefits of free trade that are substantial, and that impose significant limitations on the relevance of the results for any reliable policy prescription.
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May 23, 2018 · It drives economic growth, enhanced efficiency, increased innovation, and the greater fairness that accompanies a rules-based system. These benefits increase as overall trade—exports and imports—increases. Free trade increases access to higher-quality, lower-priced goods.
