20 - Douglas Irwin on Free Trade, the Gold Standard, and American Economic History
Aug 22, 2016
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Economics professor Douglas Irwin discusses free trade, US trade history, and the gold standard. They explore the impact of import shocks from China, the benefits of trade policies, and France's role in the Great Depression.
Free trade benefits individuals and nations through specialization and exchange, echoing Adam Smith's principles.
Protectionist sentiments in U.S. politics, exemplified by Trump, highlight divisions within parties on trade policies.
Historical U.S. trade policies, from the Embargo Act to the Smoot-Hawley Tariff, shaped economic development.
Deep dives
Introduction of Monetary Rules for a Post-Crisis World Conference
Introduction to the upcoming monetary policy conference named 'Monetary Rules for a Post-Crisis World,' co-hosted by the Mercatus Center and the Cato Institute, featuring panelists like John Taylor, Miles Kimball, and Scott Sumner.
Background and Expertise of the Guest, Doug Erwin
Doug Erwin, a professor of economics at Dartmouth College, a research associate with the National Bureau of Economic Research, and a former staff member of the President's Council of Economic Advisers, renowned for his expertise on trade and with notable publications in the field.
Arguments for Free Trade and its Benefits
Discussion on the main arguments favoring free trade, highlighting the benefits both individuals and countries enjoy from specialization and exchange, drawing parallels to Adam Smith's views on the subject.
Political Backlash Against Free Trade
Exploration of the rise of protectionist sentiments in U.S. politics, exemplified by Donald Trump's stance against free trade and the division within political parties regarding trade policies.
Impact of Trade Policy on Economic Growth
Analysis of historical trade policies in the U.S., such as the Embargo of 1807 and the Tariffs of Abominations in the 1820s, showcasing the North-South divide and the influence of protectionist measures on economic development.
Role of Gold Standard in the Great Depression
Investigation into the significance of the gold standard during the Great Depression, emphasizing France's disproportionate accumulation of gold reserves and its impact on global deflation, challenging the classical view of the U.S. as the sole catalyst for the Depression.
Douglas Irwin, professor of economics at Dartmouth College and author of Free Trade Under Fire (Princeton University Press, 2015), joins the show to discuss the economic arguments for free trade and the reasons for the heated politics surrounding trade. He describes the history of U.S. trade policy from the Embargo Act of 1808 to the Smoot-Hawley Tariff of 1930 to the North American Free Trade Agreement (NAFTA). Finally, he and David discuss the role of the inter-war gold standard during the Great Depression. [To learn more about the upcoming conference, Monetary Rules for a Post-Crisis World, co-hosted by the Mercatus Center and the Cato Institute, and register, please click the link below. You can also watch the conference online by clicking the link.] http://mercatus.org/monetaryconference?utm_source=MacroMusingsPodcast&utm_medium=link&utm_campaign=MonetaryRules David’s blog: http://macromarketmusings.blogspot.com/ Douglas Irwin’s homepage: https://www.dartmouth.edu/~dirwin/ David’s Twitter: @davidbeckworth Douglas Irwin’s Twitter: @D_A_Irwin Related links: “The Truth About Trade: What Critics Get Wrong About the Global Economy” (Foreign Affairs) https://www.foreignaffairs.com/articles/2016-06-13/truth-about-trade Free Trade Under Fire (Princeton University Press, fourth edition 2015) https://www.amazon.com/Free-Trade-under-Fire-Fourth/dp/0691166250 “The Welfare Cost of Autarky: Evidence from the Jeffersonian Trade Embargo,” 1807-09. Review of International Economics. http://www.dartmouth.edu/~dirwin/docs/Embargo.pdf “Did France Cause the Great Depression?” (NBER Working Paper) http://www.nber.org/papers/w16350
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