Re: investment and unemployment

["Kazuhiro Kurose" <kurose@xxxxxxxxxxxxxxxxxxxxxx>]

Dear everyone;

The arguments about international trade and full employment such as below are very interesting for me, so I would like
to state my opinion.

> Since we are far from
> global full employment, not even near zero structural unemployment globally,
> and not likely to be in the foreseeable future, a condition that itself may
> be structural to the existing trade regime, does this mean that trade is in
> fact counter-productive economically unless full employment is set as a
> pre-condition?  Anti traders have made the argument that the net effect of
> trade on employment is in fact negative in many economies, even though
> positive in the export sector.  The AFL-CIO thinks it is true even in the
> US.  What is the post Keynesian view on this?

I agree with this argeument. It is certain that international trade is not necessary consistent with full employment as
Ricardo's comparative advantage. There may be some tensions between international trade and full employment condition.
That is to say, trade equilibrium is one thing, macroeconomic equilibrium is quite another thing. As to this point, L
Pasinetti has already pointed out in STRUCTURAL ECONOMIC DYNAMICS, p. 159-161. I think that almost neoclassical
economists have so far neglected the inconsistency between trade equilibrium and macroeconomic equilibrium, so
PostKeynesian must emphasize this point.
However, we must not only emphasize this point, but also emphasize that there are some channels through which each
country can obtain benefits from international trade. First of all, international trade can expand the possibilities of
consumption as Ricardo said, provided that some conditions such as Pasinetti pointed out are required. A second channel
is 'that of learning new techniques in those production branches that cannot rely on internal demand (mainly because of
low income), but that can find demand abroad'(Pasinetti, op. cit, pp. 163-164). Furthermore, we must emphasize
international relation though it seems to be weak point for PostKeynesian. The open economy has an advantage, this point
is also pointed out by Pasinetti, of  making many countries get technical knowledge which is sources of increases in
productivity.

I think that PostKeynesian must pay more attention to international economics or international finance, because we can't
isolate ourselves from global economy.
What do you think about my opinion?

Sincerely

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  Kazuhiro Kurose
  Hokkaido University, Faculty of Economics
    Kita 9 Nishi 7, Kita-Ku, Sapporo, Japan
    060-0809
    TEL: ++81-11-716-2111 ex:2786
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