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Get on Track with Trade
Article

Get on Track with Trade

Trade raises productivity but may hurt some unless policies redistribute the benefits.


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Editorial Rating

8

Qualities

  • Innovative
  • Overview
  • For Beginners

Recommendation

Global trade has become a flashpoint in the United States and other advanced economies, where opponents have cited foreign competition as the major culprit behind the disappearance of local manufacturing jobs. While this remains a minority view, the vocal and sometimes vitriolic stance of those who advocate it has moved the issue of trade to political center stage. This thoughtful article from economist Maurice Obstfeld paints a more nuanced picture of how trade affects jobs and the economy. getAbstract recommends this worthwhile read to those interested in the potential impact of isolationist trade policies, particularly in the United States.

Take-Aways

  • Following World War II, global trade became a centerpiece of the world economy, enabling consumers to obtain a wide variety of goods at reasonable prices.
  • However, world trade also can bring job losses to entire economic sectors and widen income disparities when the benefits accrue mainly to the wealthy.
  • Global trade combined with technology has increased income inequality within advanced countries.

About the Author

Maurice Obstfeld is the director of research at the International Monetary Fund.