infant industry argument..

There is a a good article in the New York Times about the so called "infant industry argument" in trade literature..

excerpt

The Chinese government operated on several levels as that nation grew into an export powerhouse, Mr. Rodrik said. It nurtured the manufacture of electronic products and auto parts. It forced foreign investors into joint ventures with domestic producers. Beijing lowered trade barriers, he said, “only after it developed a relatively sophisticated manufacturing capacity.”

link
http://www.nytimes.com/2007/01/30/business/worldbusiness/30trade.html?_r=1&oref=slogin

update

here is the ongoing debate in mankiw's blog about this artcile
http://gregmankiw.blogspot.com/2007/01/rodrik.html

making globalization work

This week's economist magazine has a special survey on globalization issues. It focuses mainly on one of the major problem and discontents (particularly in United States) associated with globalization these days: growing inequaility among people in developed countries where people of those in upper half of income indstribution have seen their wages and salaries increase exponentially (benefitting from gains of trade) while those in the bottom half of distribution are facing stagnant wages.

The magazine urges for reforms in labor market, health care and education system to tackle this growing disconent against globalization, which might eventually lead to a wave of protectionism.

excerpts..
In the neat world of economics text-books the downside of globalisation looks much like Galax. Low-skilled workers in a rich country, such as America, suffer when trade expands with a poorer country with plenty of much cheaper low-skilled workers, such as China.
If labour markets are efficient in the rich country the displaced workers should find new jobs, but their wages will probably fall. Although the country overall gains handsomely, these people are often worse off. Hence the case for redistributing some of trade's gains and compensating the low-skilled losers. Traditionally, trade-displaced workers have also tended to be older and less educated than typical workers, and to have worked in only one industry. They take longer than average to find another job and, when they find one, are more likely to see their wages fall....

As public fears of globalisation rise, so will the political appeal of these schemes. But they will have less impact than getting other, more basic, policies right. Globalisation underscores the need for a flexible, dynamic labour market and a well-educated, adaptable workforce. And a worker whose health care is not tied to his job will be less worried about trade than one for whom job loss also spells the loss of medical insurance. The tasks of freeing up labour markets (in Europe), reforming health care (in America) and improving education (everywhere) are far more important than any amount of experimentation with wage insurance or retraining schemes. If politicians really want to respond to the worries caused by globalisation, those are still the best places to start.

link:
http://www.economist.com/opinion/displaystory.cfm?story_id=8548661
http://www.economist.com/research/articlesBySubject/displayStory.cfm?subjectid=423172&story_id=8559758

recently

books i have read recently or reading these days..
1. Namesake by Jhumpa Lahiri
2. The Catcher in the Rye by JD Salinger
3. The world is Flat by Thomas Friedman
4. Into Thin Air by Jon Krakauer

movies i have watched recently
1 . Apocalypto, directed by Mel Gibson
2. Blood Diamond, Starring Leonardo Di Caprio, Jeniffer Connolley
3. Crash, Starring Sandra Bullock, Don Cheadle, Matt Dillion
4. Dor, directed by Nagesh Kukunoor and starring Ayesha Takia and Gul Panag


Dor is a must watch movie. I have always liked Nagesh Kukunoor's movie right from the beginning when he came up with The Hyderbad Blues in late 90's.

"reality" in economics

There was an interesting article on New York Times today on "encouraging more reality in economics". It is based on a speech given by George A. Akerlof, current president of American Economic Association (AEA), during AEA's recent annual meet in Chicago. Akerlof, who won Nobel Prize in 2001 for his work in imperfect information, has been advocating that in real life people's behavior don't replicate the existing economic dogmas (he has been critical of Milton Friedman's theory of inflation and unemployment).

excerpt:
For example, he says, people don’t automatically insist on raises that keep their pay on par with inflation. They often are happy with smaller raises, considering them a compliment from the boss for valued work. That makes pressure for higher pay less inflationary than the Friedman approach would assume. A result, Mr. Akerlof says, is misleading theory and misguided policy.

link
http://www.nytimes.com/2007/01/06/business/06econ.html?pagewanted=1&ei=5087%0A&em&en=b7e7bb0720fe89d6&ex=1168318800

Boston 68, Dallas 52

Numbers: They say it all.....
Dallas 52
Boston 68
New Yok 72
Philadelhia 72

That was the temperature recorded for Jan 6th. I am not an environmental zealot who keeps on craping about global warming but the record temperature in north-east United States during last few days does indicate that mercury level may be permanently rising. Moreover the mis-match in temperatures in areas like Boston compared to Dallas also indicates that geographic weather patterns may have started to change permanently with the affects of global warming slowly sinking in.

There was also an article on New York times about the unusually warm weather in new york city and other north-eastern states...

link
http://www.nytimes.com/2007/01/07/nyregion/07heat.html?_r=1&oref=slogin

arundhati roy: love-hate relationship

i found this intersting article by Saba Naqvi Bhaumik on Arundhati Roy

excerpt..
The trendy style, impeccable articulation and high profile causes have certainly made Roy a romantic heroine in the West. In an article titled ‘Grassroots gamine’ the Guardian’s Madeline Bunting wrote: "The next time someone asks you what happened to feminism, you know the answer. It moved south in search of the sun."

link

http://www.outlookindia.com/full.asp?fodname=20061228&fname=saba&sid=1