Bulletin June 2008

IN THIS ISSUE...

'Made in China': the impact of low-cost imports on US industry
American shoppers who have benefited from a flood of cheap toys and clothes stamped, 'Made in China,' can hardly have failed to notice the impact of increasing trade from low income countries over the past decade. The effects on the American businesses struggling to compete in a rapidly changing market, however, are harder to measure. In a new CEPR paper, CEPR Research Fellow Andreas M Fischer and his co-author, Raphael Auer, investigate the changes wrought by a decade of low-cost imports from China, India and other developing economies, and find that the effect on manufacturers in the US has been profound, driving down prices and improving productivity.

From Baghdad to London: the Dynamics of Urban Growth in Europe and the Arab World
In 800 A.D., Baghdad, then the heart of the Abbasid Caliphate, was a thriving, cultured metropolis while Western Europe remained a stagnant economic backwater. Yet over the next thousand years an extraordinary reversal of fortune took place: the Christian West experienced a dramatic flowering of trade, wealth and population, while the Arab world entered long-term decline. A new paper by CEPR Research Associate Jan Luiten van Zanden and his co-authors Maarten Bosker and Eltjo Buringh, tries to test various theories explaining these events by examining the rise and fall of individual cities throughout the two regions.

Swapping saving schemes: are pensions the new children?
Fertility has declined markedly in developed countries over the past century. One explanation commonly cited by economists for this dramatic social change is that many people can now rely on state-funded assistance in their retirement - so they do not need to have children to look after them. In a new CEPR paper, CEPR Research Associates Vincenzo Galasso and Roberta Gatti, and their co-author Paola Profeta, test whether this argument is true.

The reality of the American Dream
Globalisation; technological change; immigration; declining trades unions - each of these trends, all important in their own right, have been carefully studied by economists to identify the winners and losers in society and the resulting shifts in the gap between rich and poor. But in an ambitious new paper, CEPR Research Fellow Robert Gordon and his co-author, Ian Dew-Becker, attempt to disentangle these and other factors, to understand the key causes of the rise in inequality in the US.