Rupee and Real futures at ICE

Intercontinental Exchange has announced cash-settled futures on the Indian Rupee and the Brazilian Real [press release] [Saabira Chaudhuri in the Wall Street Journal]. With this, ICE is the first serious global exchange to start trading in the rupee.

Vimal Balasubramaniam and I have pointed out that the global market for the Indian rupee is adding . . . → Read More: Rupee and Real futures at ICE

Egregious Indian protectionism against trade in services

For many decades, India was one of the most protectionist countries in the world. This did great damage to growth and knowledge in India. Tariffs dropped from ridiculous levels to ridiculous levels in the early 1990s and then got stuck there. Yashwant Sinha, as Finance Minister, initiated a remarkable program of cutting the peak . . . → Read More: Egregious Indian protectionism against trade in services

Manufacturing Jobs

It turns out that they’re actually good for workers:

On average, hourly wages and salaries for manufacturing jobs were $29.75 an hour in 2010 compared to $27.47 an hour for non-manufacturing jobs. Total hourly compensation, which includes employer-provided benefits, was $38.27 for workers in manufacturing jobs and $32.84 for workers in non-manufacturing jobs, a . . . → Read More: Manufacturing Jobs

Coming Home to Roost

It looks like free trade is catching up with the US:

Master Lock, which has made locks in Milwaukee since 1921, has brought 100 jobs back from China over the last year and a half. And Mr. Bink, who has worked at the plant for 33 years and heads the United Auto Workers local, . . . → Read More: Coming Home to Roost

Spot the Fallacies, Free Trade Edition

From Mises.org, in response to Obama’s claim that international trade isn’t always fair:

Here we see the view, commonly held by the media and non-economists in our universities, that international trade is a competition, analogous to sports or military competition (sometimes, “trade competition” is compared to the Cold War). If the playing field is . . . → Read More: Spot the Fallacies, Free Trade Edition

If Only There Were Some Way to Fix This

Here’s a summary of a recent paper:

The trends in offshoring and international trade that we have described are likely to accelerate. China currently employs around 120 million people in the manufacturing sector and, although some reports indicate that wages are rising in China, those wages are still only a tiny fraction of wages . . . → Read More: If Only There Were Some Way to Fix This

Flaws in the Defense of Free Trade

From Art Carden:

But there’s more to this than meets the eye. What we don’t see are the hidden costs of protectionism. The first is the waste from using costly production methods. Protectionism changes manufacturers’ incentives, and they use capital and labor that could have been better-used elsewhere to produce (say) cars. The economic . . . → Read More: Flaws in the Defense of Free Trade

I’m Right (Again)

In which my theory that free labor simply masks the underlying problem is proven correct:

But, in the first study of its kind, the MAC – set up by the last Labour government, and independent of Whitehall – said large-scale immigration was having a significant impact on the job prospects of the ‘native’ population.

. . . → Read More: I’m Right (Again)

Logical Conclusions

Sometimes economists can be complete idiots:

What is the biggest single drag on the beleaguered global economy? Opponents of globalisation might point to the current crisis, which shrank the world economy by about 5%. Proponents of globalisation might point to the remaining barriers to international flows of goods and capital, which also serve to . . . → Read More: Logical Conclusions

Free Trade Fallacies

I sympathize with the sentiment, but this is a dumb way to analyze free trade:

Decades of outsourcing manufacturing have left U.S. industry without the means to invent the next generation of high-tech products that are key to rebuilding its economy, as noted by Gary Pisano and Willy Shih in a classic article, “Restoring . . . → Read More: Free Trade Fallacies