Tom
Max Sawicky wrote:
> Michael Pollak wrote:
>
> > On Tue, 23 May 2000, Max Sawicky wrote:
> >
> > > [mbs] I don't see that the quote contradicts what I said.
> >
> > Now I'm confused. This
> >
> > > > Foreign's lower wage rate is, however, *irrelevant*
> > > > to the question of whether Home gains from trade.
> >
> > isn't the opposite of what you said? In the model you summarize, both
> >
>
> I don't think so. I said it was relative costs, as in
> the cost of X/the cost of Y in country A, relative
> to the cost of X/cost of Y in country B. NOT
> the cost of X in country A relative to the cost
> of X in country B.
>
> > sides gain even though EPI would presumably denounce Home for exporting
> > cheese jobs.
>
> > I of course accept that this model may have simplified away everything of
>
> > significance. Is that the EPI view?
>
> yes.
>
> > That comparative advantage only
> > works on paper and has nothing to do with the real world?
>
> I would say it's a powerful idea, in and of itself, but it assumes
> away lots of important things.
>
> > Are you saying
> > that's the mainstream view as well nowadays, so that there is no need to
> > refute it? In that case, could you nudge someone to dig up a cite
> > explaining why it all doesn't work anymore if it ever did? I would be
> > much obliged. Michael
>
> The mainstream view -- insofar as it goes to policy --
> is that the idea is so powerful one ought, for all
> practical purposes, to ignore everything else.
>
> mbs