Assignment -
INTRODUCTION TO THE FINAL EXERCISES - The readings in several chapters of the textbook makes it abundantly clear that trade can be beneficial and the aggregate gains from trade can be large. Yet, we are noticing that the public policy debates over trade, trade pacts and monetary unions, have taken a distinctly different tone in the years following the 2007-09 financial crisis.
We are watching the Greek tragedy in real time, the wrangling over Brexit, and trade agreements. HOW DO WE MAKE SENSE OF THESE changes in the context of the discussion of the benefits of 'free trade'?
The distributional concerns, and INEQUALITY in particular, is continuously being attributed to trade and globalization, making protectionism, despite its poor historical footprint, part of the mainstream discourse.
How does a student of trade, globalization position himself/herself in this high-decibel public forum? What is true? What should we act on? What do we need to change, so that we do not lapse into mercantilism and engineered conflict that Bretton-Woods rescued us from the horrors of the first half of the 20th century (WW-I, Great Depression, Smooth-Hawley tariffs, WW-II etc.)?
These additional readings, reliant on current research are extremely helpful for understanding how trade, as well as technology, and the transnational corporation may all be playing important roles in rising inequality (introduced in Chapter 3), and the DISTRIBUTION OF GAINS FROM TRADE WITHIN COUNTRIES. While the focus is on the United States, the research findings are applicable to several other countries as well.
TASK: PLEASE WRITE A 1000-1200 WORD ESSAY (YOU MAY EXCEED THE LIMIT BY 200 MORE WORDS), BASED ON THESE READINGS, AND ADDRESS THIS ISSUE OD DISTRIBUTION(PLEASE DIVIDE YOUR RESPONSE TO SUB-SEGMENTS, suggested below):
- How DOES TRADE INCREASE INEQUALITY in the 21st century? HOW ARE THE DISTRIBUTIONS OF GAINS FROM TRADE CHANGING between LABOR AND CAPITAL in the U.S.? Is trade and technology increasingly making 'superstars' richer? So, is trade the source of inequality, or is it technology? Is it capital?
- ARE CORPORATIONS RESPONSIBLE FOR RISING INEQUALITY? What, if anything, should governments do?
- IS RISING INEQUALITY DUE TO AUTOMATION INEVITABLE? What, if anything, should governments do?
Address all of the above issues - your success depends on the level of your engagement with the readings below (follow the guidance), and integration of your readings in crafting a response:
REQUIRED READINGS:
Chapter 1: Review the entire chapter
Chapter 3: Review: H-O, Factor Endowment Theory, Stolper-Samuelson Theorem
Chapter 9: Pages 314-316
READ selected sections of "Globalization and U.S. Wages: Modifying Classic Theory to Explain Recent Facts".
Attachment:- Assignment Files.rar