From Great Depression to Great Recession

Jaroslav Vanek ()
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Jaroslav Vanek: Department of Economics, Cornell University, USA

Review of Economics & Finance, 2011, vol. 1, 43-48

Abstract: As beggar-thy-neighbor policies contributed to the Great Depression, so did Destructive Trade contribute to, if not cause, the Great Recession. At the heart of the argument is the fact that modern policy-makers believe in free trade based on comparative advantage, neglecting the fact that with extremely wide exogenous wage differentials, free trade turns into destructive trade. Second-best type solutions must be sought.

Keywords: Free trade; Destructive trade; Comparative advantage; Second-best; Great recession (search for similar items in EconPapers)
JEL-codes: F13 F4 J6 (search for similar items in EconPapers)
Date: 2011
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