Libertarians for Ron Paul

Worried About a Recession? Don’t Blame Free Trade

“Speculation is growing that the U.S. economy may have already slipped into recession. If the past is any guide, politicians on the campaign trail will be tempted to blame trade and globalization for the passing pain of the business cycle. But an analysis of previous recessions and expansions shows that international trade and investment are not to blame for downturns in the economy and may, in fact, be moderating the business cycle.”

“In recent decades, as foreign trade and investment have been rising as a share of the U.S. economy, recessions have actually become milder and less frequent. The softening of the business cycle has become so striking that economists now refer to it as “The Great Moderation.” The more benign trend appears to date from the mid-1980s.”…

“America’s recent experience of a more globalized and less volatile economy has not been unique in the world. Other countries that have opened themselves to global markets have been less vulnerable to financial and economic shocks.”

Complete article by Daniel T. Griswold @ http://www.cato.org/pub_display.php?pub_id=9446