HL CHAPTER FOURTEEN New Departures

CHAPTER FOURTEEN New Departures
Note:14@@@@@@@@@@I RENDIMENTI CRESCENTI NEL COMMERCIO INTERNAZIONALE...NN CONTA SOLO GEOGRAFIA CE ATTITUDINI MA ANCHE CHI COMINIA X PRIMO..C È SPAZIO X L INTERVENTO GOVERNATIVO

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In the history of economic policy, the 1970s were as much a watershed as were the 1930s—maybe more so. But it was not obvious at the time. The decade’s global economic turmoil presented a crisis of a very different sort from the Great Depression—double-digit inflation rather than stagnation; relative decline; vertigo, not despair.
Note:RIVOLUZ ALLI SETTANTA

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The spirit of the times was captured somehow by the title of a Led Zeppelin song (and later a concert film and finally a movie comedy about those years), “Dazed and Confused.”
Note:ZEPPELIN

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Why were some nations growing so much faster than others?
Note:IL PROBLEMA ALLA MODA

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Only later did it become clear, gradually, how the topic of growth was supplanting economic stabilization as the most interesting problem of the day.
Note:CRESCITA O STABILITÀ?

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SO IT WAS that a twenty-four-year-old MIT graduate student named Paul Krugman one day found himself listening to a California businessman describing his fears about how Japan was using its enormous protected home market as a practice field in which to prepare to conquer global markets.
Note:PROTEZIONISMO COME TRAMPOLINO...1978

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there exists a natural pattern of specialization among nations, based on national differences in natural resource endowments.
Note:ORTODOSSIA DEL COMMERCIO INTERNAZIONALE

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the conviction that automatic market forces inevitably would restore a “natural” pattern of trade and specialization.
Note:L IDEA DOMINANTE

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At one point Krugman wrote a paper on the economics of interstellar trade, as a joke, in which he sought to adjust interest rates to take account of general relativity.
Note:DIVERTISSMENT

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Yet, what if the businessman was right? Over the years many politicians and some economists—all the way back to Alexander Hamilton and before—had espoused the protection of infant industries
Note:PROTEZIONISMO INDUSTRIA NASCENTE

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Linder was thinking of Volvo, which had entered the automotive business during World War II, when the importation of most cars to Sweden was forbidden.
Note:ESEMPIO

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Suppose the Japanese were doing exactly what the Swedes had done, Krugman wondered, but on a grander scale?
Note:E SE IL PROTEZIONISMO GIOVASSE

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Young economists were still taught that monopolistic competition was a dead end,
Note:ORTODOSSIA

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As he began to think seriously about the problem, the difficulties started to resolve. Some goods in the model would be proprietary products, like airplanes, with no immediate substitutes. Their manufacturers could set their prices monopolistically (within reason). Other goods would be like corn: many sellers, many buyers, perfect substitutes.

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Their level would be determined by plain old supply and demand. Suddenly the road ahead seemed completely clear. He stayed up all night in excitement. “I knew within a few hours that I had the key to my whole career in hand,”
Note:MODELLO A PRODOTTI MISTI...

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using proper economic logic, he had demonstrated how it might be possible not just for a firm but for an entire nation to lock in certain advantages, to lock out competitors.
Note:COSA VIDE

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Krugman could show how increasing returns and general equilibrium might coexist.
Note:LA COESISTENZA

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If one country got a head start in mass production of some sophisticated good for which there were no near-substitutes—cars, say, or airplanes or silicon chips—it might keep it.
Note:INIZIARE X PRIMI È TUTTO E LA SPECIALIZZAZIONE È NULLA

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In the language of theory, there might be multiple equilibria: this was a highly subversive result, because it undercut the welfare theorems and implied a role for government.
Note:UN RUOLO X IL GOVERNO

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the vision was increasing returns to scale in several different industries engaged in international competition.
Note:L ELEMENTO CHIARIFICATORE

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“I recall the joy in Cambridge, Mass. when Kenneth Arrow made increasing returns respectable by formalizing it. [But]…I confess some irritation over Krugman’s defense of his international trade theory as new because it offers a well-worn truth in equation form.”
Note:IL MODELLO DI K NN È BEN ACCETTATO

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Strong praise from the citadel of perfect competition that for thirty years had been the University of Chicago! Such is the persuasive power of an equation that encapsulates a well-worn truth.
Note:GLI ELOGI SOLO DALLA PARTE AVVERSA...LUCAS

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economists now viewed international commerce as consisting of two broad tiers: an underlying trade in commodities and services characterized by perfect competition and driven by comparative advantage; and an upper level of monopolistic competition in which great multinational corporations abetted by friendly government subsidies periodically mounted assaults on each other’s markets, and specialization was determined by market size.

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IL NUOVO PARADIGMA

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then logic of the upper level was nothing more than the result of history—whoever had gotten to lawn mowers or airplanes or computers first.
Note:LA LOGICA DEL SECONDO

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Governments were continually prodded to adopt “industrial policies” and to engage in “strategic trade.”
Note:CONFERMA DELLA DIMENSIONE STORICA

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Supply-side economics
Note:L ALTRA RIVOLUZIONE DELL BEPOCQ

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Robert Mundell.
Note:PROTAGONISTA

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Jude Wanniski,
Note:L ALTRO

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in a 1978 book called The Way the World Works: How Economics Fail—and Succeed, Wanniski asserted that something he called “the Mundell-Laffer hypothesis” was revolutionizing the field.
Note:IL LIBRO

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Eventually, Dornbusch persuaded the Swedes to honor his old teacher with the Nobel Prize. But the citation dwelt on the contribution he made in the 1950s; it didn’t mention the supply-side years. And Mundell’s Nobel lecture, a disjointed defense of the gold standard, persuaded few.
Note:MUNDELL L EMARGINATO

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Robert Bartley, editorial-page editor of the Wall Street Journal.
Note:ALTRO SUPPLY SIDERS

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The supply-siders asserted that cutting taxes would make the economy grow faster, thus flatly contradicting the Solow model.
Note:LA TESI

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the supply-siders conducted their business in the newspapers.
LA CAMPAGNA