Feb 4, 2009
Buy American?
Well it seems that protectionism is not an unlikely answer to the crisis. Should Americans Buy American? Krugman says...YES! Others say, hell no! .... a debate that definitely challenge the bases of International Economics
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3 comments:
I am defineley against it...buying american may result in less employment if it is not targeted at labor intensive industries...
such regulation also gives firms opportunities to extract rents from government money (tax money)...they will not have the incentives to be as efficient as possible...etc etc...
but, maybe, as Krugman seems to think, the multiplier could be bigger with this provision...
Doug Irwin is against it: http://www.nytimes.com/2009/02/01/opinion/01irwin.html?_r=1&partner=permalink&exprod=permalink
Krugman doesn't say yes. He just says it's a second best, the first best being international macro coordination. Absent this, it's a way to make the fiscal stimulus more effective. In any case I am against it, too.
ok, he say MAYBE YES... but I still was surprise with his answer, that anyways make sense..
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