(Republished with permission of YaleGlobal Online)
By Ajai Gaur and Ram MudambiNEWARK, PHILADELPHIA – Trade typically figures prominently in U.S. presidential election, and 2016 is no exception. While campaigning, politicians tend to adopt anti-international business positions that are theoretically unsound and lack empirical evidence.
Four fallacies underline these common political arguments.
- Fallacy 1: Manufacturing jobs are the basis of American prosperity.
- Fallacy 2: Imports make us poorer.
- Fallacy 3: Success of foreign firms always helps foreign countries, success of U.S. firms always helps the US economy.
- Fallacy 4: To export, firms must sell to buyers in foreign countries.
For more from the Fox School’s Dr. Ram Mudambi on the ties between politics and international business, click here.