Doug Irwin: uncertainty

Transcript context

…If you’re the Icelandic median voter, do you favor such a tax? That’s a good question. It’s on my list of places to go, so I haven’t measured that myself. But I would think that they’re getting quite wealthy as a result of this. Whether they’ve gone too far, I don’t know, and whether it’s taxing of their infrastructure. Let’s take a somewhat different approach to trade. It’s found, I think, especially in China. Some people would argue it’s even practiced by Germany as well. And that is to have a focus simply on everyone being able to keep a job, not efficiency as economists would describe it, not output, not productivity, but the notion that exports possibly can take away some of your jobs as they’ve done in parts of the American Rust Belt, that that’s very bad for your political economy. You might, believe it or not, start electing rather strange candidates, or perhaps start opposing the Chinese government in nonproductive ways. Therefore trade policy really should be governed by making sure everyone has a good enough job. China has done this through a rather extreme mercantilism. Some people would say Germany has done it by its role in the Euro system, which gives it a currency which has arguably a permanently low value relative to German productivity. Do you think there’s much to this argument?…

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