Thread by @michaelxpettis

I think they misunderstand the IMF report. Neither automation nor trade in itself causes unemployment to rise. They can eliminate specific jobs, of course, but they create new ones in the same process. They only raise unemployment if the revenues...
reuters.com/article/us-usa…

...generated are distributed so unevenly that there is a drop in demand relative to supply, which I think is a point made in the IMF paper. The problem is income distribution, not trade or automation.
This is nothing new. John Hobson already explained 120 years ago that however..

...quickly total British production rose, it could easily be absorbed by British demand as long as the income generated was distributed evenly enough to support that demand. The only way for Britain or anyone else to get richer is by increasing productivity, and automation – or..

...anything else that increases productivity, including trade – only eliminates jobs to the extent that it redistributes income from those who spend it to those who won’t.
Trade with China, for example, is only a problem because Chinese workers and middle-class households...

...receive too low a share of China’s trade revenues, and so the Chinese consume too little of what they earn and save most of it, recycling the dollars earned not in the form of imports but in the form of asset purchases. If the IMF doesn’t find much of a correlation between...

...trade deficits and unemployment, that’s only because the impact is more likely to show up as debt.
The problem with globalization (which usually involves both expansions in trade and major advances in applied technology) isn’t globalization itself. The problem is its impact...

...on worsening income distribution, as Matt Klein and I discuss in our upcoming book. 🤑
yalebooks.yale.edu/book/978030024…