Forbes ⁽⁴⁾

Read full article Abstract: During her recent visit to India, Secretary of State Hillary Clinton tried to prepare the ground for the major negotiation on carbon emissions in Copenhagen in December by calling upon India to join hands with the United States to "combat global warming." Recognizing that Clinton was indirectly calling for India to accept mitigation commitments at Copenhagen, India's environment minister Jairam Ramesh reacted swiftly and sharply stating that his country was "simply not in a position to take on legally binding emissions [reduction] targets." Is India being self-righteous and risking its own interest, as the Financial Times and The New York Times claimed in the wake of the tough stance by Ramesh, or acting in self-interest while asserting its reasonable rights? A good case can be made in favor of the latter.

Read full article Abstract: The Group of Twenty (G-20) major nations accounting for 90% of the world's gross domestic product, 80% of its trade and two-thirds of its population will meet in London beginning April 2, 2009. They plan to discuss the cooperative steps necessary to bring the current economic crisis to a speedy end. If history is any guide, measures to roll back creeping protection and move the process of trade liberalization forward ought to be high on their agenda. The Smoot-Hawley Tariffs Act of June 1930, which quadrupled the then-effective tax rate on several thousand imported items to 60% and brought swift retaliatory response from the major U.S. trading partners, accelerated the spiraling down of trade flows worldwide. According to the State Department, between 1929 and 1932, the U.S. exports to, and imports from, Europe fell 67% and 71%, respectively. This rapid decline contributed to the deepening of the economic depression.

Read full article (on Brookings) Abstract: With the highly proficient National Security Guard commandos having killed the last of the terrorists holed up in the Taj Hotel in Mumbai, the question on everyone’s mind is what effect the tragedy will have on the economy. Despite some clear differences between the Mumbai tragedy and the 9/11 New York calamity, the latter provides a good starting point for answering this question. The effects of the 9/11 events, now extensively studied and analyzed, may be considered at the local level on New York City and at the national level on the United States. In the immediate aftermath of the 9/11 terrorist attacks, many analysts predicted significant permanent damage to the economy of the New York City. There is now virtual consensus, however, that the effects were smaller than initially predicted and were short-lived. A July 12, 2006, report by the Federal Reserve Bank of New York concluded that the economic effects of the terrorist attacks were sharp but short-lived and had largely disappeared by the end of 2002. According to the Federal Reserve…

Read full article Abstract: After nearly 30 years, the Swedish Academy has returned to international trade awarding the Nobel Prize to Princeton economist Paul Krugman. Earlier, in 1977, the award had gone to two giants, Bertil Ohlin and James Meade, whose brilliant work formed the foundations of trade theory as it was taught when I came to Princeton to do my Ph.D. in 1974. Krugman, no less a giant, revolutionized the field. Until the end of the 1970s, the Heckscher-Ohlin theory for which Bertil Ohlin won the prize--Eli Heckscher died before the Nobel Prize in economics was instituted--dominated the field. This theory explained well why labor-abundant countries such as South Korea and Taiwan would export labor-intensive products such apparel, toys and footwear and capital-abundant countries such as the United States would export machinery and aircraft.