Don Boudreaux on Globalization and Trade Deficits

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Listen to the EconTalk podcast Don Boudreaux on Globalization and Trade Deficits and consider these questions.

1. The interview begins with Professor Boudreaux describing the fundamentals of trade, as originally described by Smith and Ricardo. What are these fundamentals?

2. How did Ricardo's analysis add to Smith's understanding of the bases of trade?

3. How does Boudreaux counter the argument that "trade hurts some people"? What is the "constitutional bargain" we all make in terms of international trade? Is this argument compelling?

4. Paraphrase Boudreaux and Roberts' discussion on the relationship between trade and national borders. What is the economic relevance of political borders?

5. What is the trade deficit? What is the difference between the current account deficit and the merchandise trade deficit? Why is this a distinction that should be made in public discourse?

6. Interviewer Roberts says many people worry about the trade deficit because they believe "not all the money comes back". Is the trade deficit an accurate picture of American indebtedness?

7. What is the relationship between the (federal) budget deficit and the trade deficit?

8. Why might it be good policy for the United States (or any other nation) to attract more foreign direct investment than they themselves invest abroad?

9. To what extent does should inequality be of concern in terms of globalization? What does Boudreaux think? Do you agree?