It seems very interesting what is going on in this discussion, and I am
afraid that I can hardly follow.
Anyway, let me clarifiy small points. A colleague wrote:
>
>Except the paper says "_In the very last resort_, the United States should
>not forget that nondiscriminatory measures to control imports . . . are
>permitted under Article 12 of the successor to GATT." (Whether you believe
>such measures can be non-discriminatory is another matter.)
the meaning of nondiscriminatory here is simply that the aim is to protect
the general level of employment 'in house', not to protect one or a couple
of industries and unprotect the others. In this sense, tariffs seem to be
the appropriate instrument, rather than quotas. Implicitly, it cannot be
done without 'coordination' between trading partners, otherwise it lead to
retaliation... Now, again, Wynne's proposal is a much more elaborated one
than what we suggested in the paper. It requires a set of coordinated
measures in which import restrictions go hand in hand with fiscal
relaxation....
>From there onwards, yes, I could agree that 'coordination between countries'
is not an even game: anybody can imagine what the 'coordination between
Haiti and the US' could be, for example.
The authors
>argue that the best case scenario is that the U.S.' private financial
>balance wouldn't revert, and growth would continue at about 3%, in which
>case, Indonesian textile workers are about where they are now. As others
>have pointed out, the authors' emphasis here and elsewhere is on fiscal and
>tax policy needed to sustain growth. They also suggest that other countries
>could engage in some coordinated reflation. >
Yes, this is actually our main point in terms of possible strategic
solutions. You are perfectly right. The problem seems to be that these are
not very 'popular' solutions nowadays.
A side remark, the 3% growth rate is, in our view, totally unrealistic. Out
of the question. In the paper is presented as a baseline because that is the
Congressional Budget Office (CBO) forecast.
regards,
Alex
