International Trade=Lower Prices

Questions for today.
1. Do you think it's a coincidence that the categories with the lowest price changes are the ones that are traded internationally?
2. Do you think it's a coincidence that the categories with the highest rate of price change are the ones with the most regulation and government subsidy?
3. What do you think will happen if we adopt more protectionist policies?

Capitalism's Effects in One Chart

Maybe we could send Bernie Sanders and his supporters to China to explain how much better off they were before they emulated the capitalistic, free trade policies of the West.

Poverty and Globalization

Mark Perry notes that economists Maxim Pinkovskiv and Xavier Sala-i-Martin published this paper at the National Bureau of Economic Research.  Using parametric methods to estimate the income distribution for 191 countries between 1970 and 2006 they show how dramatically the level of abject poverty ($1/day threshold in constant dollars) has declined since 1970. That's 250MM fewer people living on $1 per day. You may not see this too many places because it runs counter to the media mantra that free trade and globalization have hurt the poor. Does it look that way?