Trump’s Mercantilist Mess. Robert Barro, September 5, 2019, Opinion, “When US President Donald Trump boasted that trade wars are “easy to win” in March 2018, it was convenient to dismiss the remark as a rhetorical flourish. Yet it is now clear that Trump meant it, because he genuinely believes the bizarre and anachronistic macroeconomic theories underlying his approach.Link

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Launch a Pre-Emptive Strike Against Recession. Jason Furman, September 5, 2019, Opinion, “President Trump was right to set aside premature plans for fiscal stimulus last month. Based on the current economic situation, stimulus isn’t yet warranted—but it may be soon. Given the uncertainty, Congress should pass a law immediately that would automatically trigger stimulus if the labor market deteriorates, with unemployment rising rapidly. The package should include not only tax cuts but also relief for states, as well as extra…Link

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Why Companies Reject Trump’s Deregulation Theology. Cass Sunstein, September 4, 2019, Opinion, “Here is a puzzle about some of the Donald Trump administration’s most prominent deregulatory efforts: The very companies that are supposed to benefit from those efforts do not welcome them. In some cases, they strenuously oppose them.Link

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The Inherent Failures of Long-Term Contracts — and How to Fix Them. Oliver Hart, September 3, 2019, Audio, “Oliver Hart, Nobel-winning Harvard economist, and Kate Vitasek, faculty at the University of Tennessee, argue that many business contracts are imperfect, no matter how bulletproof you try to make them. Especially in complicated relationships such as outsourcing, one side ends up feeling like they’re getting a bad deal, and it can spiral into a tit for tat battle. Hart and Vitasek argue that companies should instead adopt so-called relational contracts. Their research shows that creating a general playbook built around principles like fairness and reciprocity offers greater benefits to both businesses. Hart and Vitasek, with the Swedish attorney David Frydlinger, cowrote the HBR article “A New Approach to Contracts.”Link

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At Booking.com, Innovation Means Constant Failure. Stefan Thomke, September 3, 2019, Audio, “Harvard Business School professor Stefan Thomke discusses how past experience and intuition can be misleading when attempting to launch an innovative new product, service, business model, or process in his case “Booking.com” (co-author: Daniela Beyersdorfer) and his new book, “Experimentation Works.” Instead, Booking.com and other innovative firms embrace a culture where testing, experimentation, and even failure are at the heart of what they do.Link

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The Benefits of a Progressive Consumption Tax. Kenneth Rogoff, September 3, 2019, Opinion, “Many economists already favor a consumption-based tax system for raising revenue on grounds of efficiency and simplicity. In an environment where wealth inequality is rising inexorably, the case for doing so has become increasingly compelling.Link

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If Business Roundtable CEOs are serious about reform, here’s what they should do. Lawrence Summers, September 2, 2019, Opinion, “The Business Roundtable recently announced a major policy change declaring that the purpose of a corporation is not just to serve shareholders (its official position since 1997) but “to create value for all our stakeholders.” At a time of considerable disillusionment with U.S. capitalism, this is a significant statement that could signal meaningful change in the operation of the American economy. Certainly the recognition by leading chief executives that they need to look beyond the narrow metric of their stock price is to be welcomed.Link

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Don’t Blame Economics, Blame Public Policy. Ricardo Hausmann, September 1, 2019, Opinion, “Engineering and medicine have in many respects become separate from their respective underlying sciences of physics and biology. Public-policy schools, which typically have a strong economics focus, must now rethink the way they teach students – and medical schools could offer a model to follow.Link

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Jeffrey Frankel Says More... Jeffrey Frankel, September 2019, Opinion, “Welcome to Say More, a weekly newsletter that brings Project Syndicate’s renowned contributors closer to readers. Each issue invites a selected contributor to expand on topics covered in their commentaries, address new ones, and share recommendations, offering readers exclusive insights into the ideas, interests, and personalities of the world’s leading thinkers. This week, Project Syndicate catches up with Jeffrey Frankel, Professor of Capital Formation and Growth at Harvard University’s Kennedy School of Government.Link

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China’s rise and the growing doubts over trade multilateralism. Mark Wu, 2019, Book Chapter, “China’s impressive economic and technological rise in the early 21st century is unprecedented in modern times. For one, it marks the first time in the postwar era that the world’s leading trade power has embraced an economic and political model different than the traditional liberal democratic, market-oriented model associated with industrialised nations. While the world trading system has never mandated that countries within the regime conform to any economic model per se, the postwar global trade regime has always been led by countries within the Western security alliance, with the US at its fore. China, however, has sought to chart out its own path.Link

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