午夜剧场

Recently, not a day goes by without seeing news about the US-China trade war. People make a fuss about the two countries competing to win or lose. President Trump states that many American workers are losing their jobs because of the trade deficit with China. Many people likely accept these arguments as "obvious" without feeling any sense of contradiction. I, too, would have accepted them naturally if I had not had the two experiences I am about to share during my student days.

The first was my experience at the end of my second year in the Faculty of Economics, when I took the exam to enter the seminar of my mentor, Professor Michihiro Ohyama. The exam consisted of two subjects, English and Economics, and the English portion required reading and summarizing a passage from a book by Paul Krugman (Pop Internationalism, The MIT Press, 1996). Politicians and others often argue as if nations compete in the international market to win or lose just like companies do, but that is a mistake. Companies can go bankrupt, but nations do not. Trade is not a game of winning or losing; it is something that brings benefits to both countries. This can be easily demonstrated with basic trade theory.

The second was during my second year in the Doctoral Programs at the Department of Economics, University of Minnesota, when I gave a group presentation on the theme of trade and wage inequality in a class taught by Professor Timothy Kehoe, who would later become my advisor. The widening wage gap between skilled and unskilled workers seen in many developed and developing countries cannot be explained by trade. According to standard trade theory, after trade, the wage gap widens in developed countries but narrows in developing countries. Using this discrepancy between reality and theory as one reason, many economists seek the primary cause of the widening wage gap not in trade, but in technological progress due to the introduction of high-tech computers. They argue that domestic workers are not competing with foreign workers.

From these two experiences, I learned that arguments taken as "obvious"—such as nations competing in international markets like companies, or many domestic workers losing their jobs because of trade—are actually not obvious at all from the perspective of basic economics.

As I continue my research in economics, I look forward to again having experiences that make me realize things I thought were "obvious" were not. I also hope to provide opportunities for students taking my classes or seminars to have such experiences.