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How can investors analyze Donald Trump’s policy? This is a burning question right now Markets fall After announcing the tariffs on Wednesday, the US President announced that the Protectionists of the 1930s exceeded the 2030s.
Although economic thinking in the 20th century is an objective of economic thinking, it is the day of freedom announced as such an economic declaration, as it may seem better than such a economy.
However, at the moment there is an economist that is very relevant: Albert Hirschman, a game author, published in 1945, The structure of national power and foreign trade.
In recent decades, this work, Jeremy Adelman, as a Princeton historian writing the biography of Hirschman, was taken into account in large numbers. Not surprising. The German Jewish economist spent such trauma in Spanish civil war and Nazi Germany, Berkeley, Berkeley, as an economist, decided to study Avtarky.
Rather, the 1930s used the measurement of catastrophic protectionism to measure economic coercion and develop a framework for the preparation of Hegemon’s power (insulting academic word). However, this analysis was not taken into account by trade economists for both trade economists, but also for neoliberal ideas.
Instead, the main effect of the book was in the antitrust analysis. Economist Orris Herfindahl later used his views to create Hirschman Corporate concentration measuring index, The United States was adopted by the Ministry of Justice and among others.
However, Hirschman, if he was alive to watch Trump, opened the Tariff Strategy in the White House this week, this week would not be laughed. Neoliberal thinkers often see politics as a derivative of the economy. However, Hirschman reverse it reverse that “sovereign people have trade relations with the competition for the national force, as a country can trade with any country,” he said.
Adelman says. This is close to Trump’s analyzes the economy. However, the man is different from Smith or David Ricardo’s trade flows (relatively stronger players participate in the player).
Some economists are based on this turn. Only after speaking from Trump, the trio of American economists – Christopher Clayton, Matteo Maggiori and Jesse Schreager – released a piece of paper To describe the growing area of the “Geoeconomics” area inspired by Hirschman.
The trio first acknowledges Maggiori because it acknowledges Maggiori because this research diary, four years ago, “it seemed interested in everyone.” However, the percentage is growing now, says that after the global financial crisis, it predicts an intellectual turn compared to what happened. For example, this year, the American Financial Association, for example, in a novel session of the geo-economist, former IMF chief economist (and Hirschman’s fan) demonstrated a novel meeting in Mauricemiks speech.
This work has already developed three topics in investors to pay attention to. The first and most obviously, the analysis of the trio is dangerous for the fact that smaller countries are dangerous to be more dependent on any major trading partner and they Offer tools measure such weakness.
Second, today the source of the American power of the American is not produced (controls of basic supply in China), but instead of structured around the financial and formed system.
Trump tariffs, therefore, in fact, an attempt to occur another Hegemon (China), but the policies around finance are an effort to dominate the existing. (I would argue in technological power, I would have argued, still arguing.) Issues of this difference for other countries trying to respond.
Third, the trio does not work in a symmetrical way of hegemon power. If you have a bully 80 percent market share, say, generally have 100 percent control; However, if the market share shifts to 70 percent, hegemon strength breaks faster, because the weak can see alternatives.
This explains that the United States cannot manage Russia with financial sanctions. Other countries can react to Trump’s aggressive tariffs by imagining and developing alternatives to other countries, dollar-based financial system. Bullies seem to be disappeared – unless you are.
Depression of this analysis? Yes. But it should not be taken into account. And if the shock investors and politicians want to delight themselves, they focus on something else. He thought that people can learn from history to develop history.
Trump now ignores this lesson, not the lesson, sad results. But no one else should.
