Smelkowsky

W ZUS ekonomista mam wpisane.

[Smelkowsky @smelkowsky]

@Schizoecon420 @BorutaHope @naryczalcie Spółdzielnia stadionów polskich pod przewodnictwem W&L Poznań na już!

[Smelkowsky @smelkowsky]

@Schizoecon420 xddddddddd

[Krystian MISTRZ PREMIER LEAGUE 2025/26 @KrisAmbrO]

W Arsenalowyxh domach

[Arsenal @Arsenal]

The Arsenal. Your Premier League champions.

[Smelkowsky @smelkowsky]

@grzybowski__ @Schizoecon420 No i nie podobasz mi się

[Smelkowsky @smelkowsky]

@Schizoecon420 @grzybowski__ XDDDD tylko jeden klub

[Smelkowsky @smelkowsky]

@Schizoecon420 @grzybowski__ Obaj nie lubimy Falubazu

[Smelkowsky @smelkowsky]

@Schizoecon420 @grzybowski__ @Schizoecon420 goj kłamie

[Smelkowsky @smelkowsky]

Hehe

[Lech Poznań ⭐️ @LechPoznan]

MISTRZ, MISTRZ, KOLEJORZ ⭐️
#KOLE10RZ

[Smelkowsky @smelkowsky]

@Schizoecon420 @HStojanowski @yeshivagrl Lech, Lech Kolejorz!

[Ryszard Szarfenberg @RSzarfenberg]

Polska w OECD - najniższa mobilność międzypokoleniowa.
Dzieci rodziców z wyższym wykształceniem mają wyraźnie większe szanse na znalezienie się w górnym kwintylu zarobków, a dzieci rodziców z niskim wykształceniem - wyraźnie wyższe ryzyko utkwienia w dolnym kwintylu.

[Smelkowsky @smelkowsky]

@JesusFerna7026 @ojblanchard1 You sound like de Tocqueville in "The Old Regime and the Revolution"!

[Smelkowsky @smelkowsky]

@Schizoecon420

[Smelkowsky @smelkowsky]

@Schizoecon420 Very good

[Michael Pettis @michaelxpettis]

Mainstream trade economists have recently been passing around this NBER Working Paper that, perhaps not surprisingly, reinforces the mainstream academic view of trade intervention. The paper argues that trade generally raises welfare by enabling specialization and exchange, that tariffs distort this system and so reduce welfare, and that while large countries may gain slightly through terms-of-trade manipulation, global retaliation and trade wars quickly eliminate those gains.

While this may sound pretty conclusive, and seems to support the almost universal assumption by academic economists that trade intervention under any conditions always reduces welfare for the country that intervenes, it is important to understand the assumptions behind the model.

A model is circular. It does not create new "truths" but rather restates the underlying assumptions in a logical (some would say "circular") way. Among other things this means that if the assumptions underlying a model are not fully consistent with real conditions, the conclusions of the model have no validity in the "real" world. Models can be very useful when widely accepted assumptions lead logically to a seemingly counterintuitive conclusion, but this is incredibly rare. Otherwise the role of economic models is mostly to create an air of scientific rigor for a decidedly non-scientific discipline.

It turns out that this particular model depends on several strong assumptions. It assumes that firms are price takers, that there is free entry and exit in the global trading system, and that prices equal marginal cost (which means, among other things, that production isn't subsidized to an extent that significantly changes trading patterns). Most importantly, the model assumes that global trade is broadly balanced, i.e. that a change in exports by any country is matched by an equivalent chnage in imports.

These are all very typical assumptions in a lot of academic trade models, not because they describe reality, but because they make it much easier to model, but not one of them is a reasonable description of the real world. They assume that we live and trade in the world of Econ 101, i.e. an idealized world of free and balanced trade, in which countries maximize global output by specializing in their areas of comparative advantage, and in which countries do not intervene in their external accounts.

Like most academic trade models, in other words, it assumes a global trading system that clearly does not reflect the actual global trading system. Every one of the assumptions listed above is regularly violated, most obviously the assumption of broadly balanced trade.

But based on this very unrealistic set of assumptions, it seems to suggest policy recommendations. Basically what this model (and most other mainstream trade models) tells us is that in a world of balanced and output-maximizing trade, if governments intervene to create trade imbalances, they will reduce total output.

But that should be obvious. I fully agree with the conclusion, in other words, and if you start with an existing system that already maximizes global output, it is no great insight that any distortion in that system will reduce global output.

The problem is that because the underlying assumptions are not clearly stated, and because there is no attempt to judge the validity of the conclusions under more realistic conditions, it is easy to conclude that even in the highly distorted, unbalanced global trading system of the real world, in which major economies use massive trade intervention to externalize the cost of domestic policy distortions, this paper implies that countries with open external accounts always benefit by keeping them open.

But if we do in fact live in a global trading system in which some major governments already intervene heavily through trade and industrial policies, distorting trade in ways that create trade imbalances and reduce total output, wouldn't it follow that other governments that haven't done the same could subsequently implement trade and industrial policies designed to reverse these imbalances, in which case they would raise global output?

I recognize that it is very hard to compose publishable papers on complex topics based on models that assume deep, persistent trade imbalances, firms that are not price takers, massive intervention on the part of major economies in their external accounts, trade patterns based not on comparative advantage but on competitive advantage, and the transmission of industrial policies from more closed economies to more open economies.

But that, in fact, is the world in which we live. The conclusions of models that are built on a completely different set of assumptions may on occasion be intellectually interesting, but they should have little to no bearing on actual policymaking.

[Smelkowsky @smelkowsky]

@Schizoecon420 Pełne zatrudnienie 🤑

[Smelkowsky @smelkowsky]

Fajne, 8/10.

[Smelkowsky @smelkowsky]

@Schizoecon420 No to źle widzisz byku

[Smelkowsky @smelkowsky]

@jonasz_zasowski Let's go