Economics & Policy in the Age of Trump

Олег с коллегами написали книгу о том, что ожидать в экономике США в эпоху Трампа. Книга на английском, ее можно бесплатно загрузить вот здесь. Под катом отзыв о книге от Financial Times.

Know thine enemy?

Top economists publish an essential visitor’s guide to economic policy in the Trump era

 Martin Sandbu’s Free Lunch 

by: Martin Sandbu

It is no secret that the bulk of the economics profession is troubled by the Trump administration’s approach to economic policy. Now a stellar set of economists has written an anthology of highly useful analytical briefs on virtually all aspects of US economic policy in the age of Donald Trump. Chad Bown of the Peterson Institute has summarised the research effort in a column for VoxEU and the Centre for Economic Policy Research, who publish the book today. (The full book is here, and requires the reader to register for a free account.)

Inevitably, the book sometimes covers well-trodden territory. There are chapters on Trump’s tax reform proposals (recently also addressed by Free Lunch) and financial regulatory reform. Chapters on healthcare, immigration and labour markets also synthesise a debate that Free Lunch readers are no doubt familiar with. The third part of the book is devoted to trade policy, the subject of intense debate among economists and policymakers for some time. 

Even in familiar terrain, this book is as good a guide as one can hope to get. First of all that is precisely because it is comprehensive: if you need to quickly inform yourself about the latest controversial economic proposal from Washington, you are likely to find what you need here. (And those already informed will find off-the-shelf basic bibliographies for when they need to reference the evidence.) Second, the authors have taken unusual (for economists) care to be clear, concise, and accessible without dumbing down the analysis. Each chapter is short, to the point, and covers the essential knowledge an informed citizen needs to have. (The World Bank’s chief economist, Paul Romer, could usefully take this book as a model in his crusade for better writing from the bank.)

But third, these succinct chapters offer both guidance to less well-known or more abstruse policy areas — including anti-poverty and social mobility policy, the trade effect of fuel standards, “border adjustment” taxation, and trade rule enforcement policy — and have a knack of homing in on how contemporary economic research often leads to more nuanced analysis than the simplistic economic reasoning sometimes dominating the policy debate (what James Kwak has called “economism”).

That means even those who follow these debates can learn something new. Arik Levinson, for instance, argues that fuel economy standards for cars “have a built-in bias equivalent to a tariff on imports ranging from $80 to $200 per car. Loosening the standards would lower those implicit tariffs”.

In another example, Emily Blanchard summarises the “trade shock” debate well: “while Nafta may have done little to boost or harm overall growth and prosperity on the continent, it has had a powerful role in redefining how and where products are made”. She then provides a useful elaboration on how cross-border supply chains make the distribution of losses and gains much more complex than traditional trade, which is why trying to leave Nafta — rather than renegotiate it — could bring about as much real harm as Nafta itself is accused of having caused.

If there is one large and economically significant policy area the book leaves out, it is climate change which has of course become topical since Trump’s decision last week to pull the US out of the Paris agreement (the chapter on vehicle fuel efficiency bears on this topic, but narrowly). So to complete your reading, add to this book my FT colleagues’ analysis of what the US withdrawal means. As they point out, much of the climate change action takes place at the state level rather than the federal government: most US states have renewable energy or carbon emissions reduction policies in place.

Researchers at Massachusetts Institute of Technology have made a first stab at quantifying how much the US states can achieve on their own. Their analysis gives grounds for hope. For example, states accounting for almost four-tenths of the US economy have vowed to honour the Paris agreement and continue the efforts continued US participation would have required them to contribute. On renewable energy, current state policies could “go about 60 per cent of the way toward the renewables expansion previously expected under federal policy”. The MIT note nicely states the economic rationale for climate change policy: it reduces the risk for private sector investments in green energy-related sectors that are well on their way to becoming lucrative growth industries. If the global economy is slowly, but surely decarbonising, business sectors will benefit most in those countries which have certainty over regulatory and financial incentives so as to position themselves to capture this emerging market — including, significantly, in manufacturing.

There is an inevitable “know thine enemy” flavour to much of this writing, as most of the writers disapprove of the course US policymaking is currently setting. But it is an informed disapproval which often accepts some of the stated aims of the Trump administration in terms of benefiting left-behind segments of the population, while arguing that the chosen policies are counterproductive and highlighting others that would do the job better. That, surely, is what public-spirited economics is all about. 

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