No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Chapter Fifteen: Issues in International Economics 384 IT’S A WRAP! While most discussion of economics treats international trade as somehow different, we’ve learned that trade is not conceptually different if it’s across town or across the world. Unfortunately, there are significantly more political economy issues associated with international trade, as narrow self-interest is more easily disguised as in the national interest. This is not a new problem; ever since economics was systematized with Adam Smith’s classic work The Wealth of Nations , economists have had to confront fallacies in trade. The ghost of mercantilism lives on. In our next chapter, we’ll change gears and start thinking about the future…entering the sometimes glamorous and sometimes confusing world of finance. We know that the essence of the market process requires an entrepreneur to guide through the waters of time, ignorance, and uncertainty of the future. How do we value returns which are only potentially available in the future? That’s the topic of chapter 16.