Will High Oil Prices Slow Down Globalization and International Trade?
#spacer{clear:left}#abc #sidebar{margin-top:1.5em}if(zs>0){zSB(3,3)}else{gEI(“spacer”).style.display=’none’;gEI(“sidebar”).style.display=’none’}At the very least, it will make some changes to how international trade is conducted. One big winner might be Mexico: Econbrowser on trade and high oil: The note discusses how the decreasing in tradability of goods from China and other low wage countries will tend to release downward pressure on US wages and prices, making the Fed’s job of maintaining price stability more difficult. In the abstract, I’d agree with that point, to the extent greater insulation from foreign competitive pressures should give greater pricing power to domestic producers, in a monopolistically competitive setting… Air freight costs are rising for two reasons — higher oil prices as noted above, and also a weaker dollar… If this reversal of air freight cost trends is mirrored by the cost
