tag:blogger.com,1999:blog-1331441403058020963.post2924620065048719090..comments2024-03-28T06:49:24.930-04:00Comments on International Political Economy at the University of North Carolina: Canard PekinoisThomas Oatleyhttp://www.blogger.com/profile/14092437150746625670noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-1331441403058020963.post-52649443715494719332009-01-28T13:48:00.000-05:002009-01-28T13:48:00.000-05:00It's Emmanuel reporting for duty ;-) I believe I'm...It's Emmanuel reporting for duty ;-) I believe I'm being unfairly lumped into the protectionist camp:<BR/><BR/>(1) What commentators seem to miss is another IPE point I wish to make. Dollar devaluation will not be the main avenue for correcting global imbalances but rather LDC aversion to footing America's external tab. If capital account flows to the US slow dramatically as China stops piling on reserves and others follow suit, then America will have no choice but to undergo "structural adjustment."<BR/><BR/>Nor am I claiming this will be a painless process. As I am more of an impartial spectator belonging to neither camp of combatants, I am probably more gung-ho on this point than my American counterparts. A reader also brought this point up about price elasticity of demand to which I made a <A HREF="http://ipezone.blogspot.com/2009/01/did-trade-liberalization-enable-credit.html" REL="nofollow">similar reply</A>. Savings are not exogenously determined; others' willingness to foot America's bill matters a lot and is not really considered in the literature provided. Simply put, price elasticity of demand matters a lot less when there's no one to foot a current account imbalance. <BR/><BR/>[Also note that the Marshall-Lerner condition was met in the IMF model once correction for aggregation bias was applied.]<BR/><BR/>(2) People keep hurling this idea at me that a China-US trade row is the slippery slope that leads to Smoot-Hawley II. Like Vietnam-era domino theory, I do not think this is likely. There is this thing called the WTO now, and LDCs have much tariff water to play with anyhow. I dislike protectionism in general, though I am keen on the possibility of the US initiating boneheaded currency legislation against China that makes the PRC reconsider its poor investment choices. <BR/><BR/>To get things moving, China doesn't have to sell its Treasury stash a la the hyperbole of a "nuclear option." Mainly, it needs to stop buying Treasuries. <BR/><BR/>(3) I too will establish a scenario of how I believe things may play out. Bear with me as I'm all by my lonesome instead of four of you!Emmanuelhttps://www.blogger.com/profile/04615366847433704476noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-26251194207853975162009-01-28T07:32:00.000-05:002009-01-28T07:32:00.000-05:00I posted a comment on seeking alpha, then I found ...I posted a comment on seeking alpha, then I found your blog. I'll summarize it here.<BR/><BR/>First of all, great article. Your analogy to lower your hourly wage is great. I wonder how you would explain what it does to the U.S. debt?<BR/><BR/>Now, I had one comment: Couldn't it be that the demand for goods is inelastic in the short-run, but elastic in the long-run? Gasoline is the example I'm thinking of, since U.S. consumers initially seem to consume the same amount of gasoline, but over the long run they switch to more fuel-efficient cars and substitute alternative energies like electricity.Jason Fosterhttps://www.blogger.com/profile/18328920238255667985noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-64867687304265794672009-01-27T21:27:00.000-05:002009-01-27T21:27:00.000-05:00the links to the IMF paper are broken, and i'm int...the links to the IMF paper are broken, and i'm interested in reading it. working paper #95 in 2007 seems to be about technological development, which doesn't seem like what you were talking about.Kindred Winecoffhttps://www.blogger.com/profile/14330671232391851377noreply@blogger.com