Question
During the 2020 Democratic Presidential Primaries, one of the candidates in the Democratic Primariesnamely, Bernie Sandersbluntly suggests that increased trade openness sharply increases income inequality
During the 2020 Democratic Presidential Primaries, one of the candidates in the Democratic Primariesnamely, Bernie Sandersbluntly suggests that increased trade openness sharply increases "income inequality" in the U.S. and leads to job losses in especially the manufacturing sector. He also suggested that one solution for the U.S to address these problems is to raise trade barriers, avoid signing or renege from existing free trade agreements (FTAs) with other countries, and finally reduce American commitments to the World Trade Organization. Let us assume for a moment that Bernie Sanders' view about income inequality is correct. If so, then what explains why greater trade openness (and hence more economic globalization) leads to higher income inequality? In particular, which tools of International Trade theory can be used to explain the link between trade liberalization and income inequality in the US and why? Do you agree with Bernie Sander's view that the US can address problems such as income inequality stemming from trade globalization by becoming more "protectionist"? Why or why not?
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