Tuesday, May 5, 2015

Dani Rodrik On The Transatlantic Trade and Investment Plan

There has been a lot of debate about the proposed Transpacific trade plan.  Dani Rodrik shifts his attention to the proposed Transatlantic trade plan.  In particular, he reviews two analyses of the purported economic impacts from the trade plan.  He believes that the real issue is the investor-state dispute resolution which turns the resolution of disputes over to a third party.  However, he chose to analyze two studies which reach different conclusions about the economic impact from the trade plan.  The studies reach different conclusions about the impact but that is less important than his explanation of the assumptions used in each model, and the limited importance of the types of gains which were used as the dependent variables over the long term.  One would not want to base one's decision about the trade plan based upon the conclusions from the models which were used to describe the long range results by 2027.  They might just as well tried to predict the weather in 2027.

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