Krugman on Gravity and Trade

that the volume of trade between Kanesh and various trading partners seems to fit a gravity equation: trade between any two regional economies is roughly proportional to the product of their GDPs and inversely related to distance. Neat.

But what does the seemingly universal applicability of the gravity equation tell us?

It’s the law!

(via Gravity)

Krugman on trade is always worth a read.

If you want to grow slightly alarmed about the American future, contemplate not just the scale of our trade deficit with China but the fact that our largest export to them by a wide margin is soybeans.

President Obama’s muddled plan to boost employment by hindering trade

President Obama’s muddled plan to boost employment by hindering trade

Maybe Fair Trade Cotton Isn’t Growth By Child Slaves After All

Maybe Fair Trade Cotton Isn’t Growth By Child Slaves After All

US Trade Deficit is Half Oil

A government official emphasized to me today what should be clear to anyone who follows Calculated Risk’s charts, namely that a huge element of our trade deficit has nothing to do with China or manufacturing but is instead driven by oil:

Now it’s not unusual that the US is a net oil importer. Most countries are. But America is a much more oil-dependent country than other places are. 

From US Trade Deficit is Half Oil

The ongoing bailouts of the Oil Industry are the cause of half of us debt.