In a perfectly free-market environment, trade between countries occurs when private actors in those countries find it mutually advantageous to trade. Governments are involved only in that they create the market conditions that minimize transactions costs, thus maximizing the opportunities for mutually advantageous gain. In the real world, of course, governments do engage in all […]
Imperfect Methodology But the Right Results? The USITC Report on the Economic Impact of U.S. Sanctions with Respect to Cuba
The USITC report, The Economic Impact of U.S. Sanctions with Respect to Cuba, uses the gravity model as the basis for its estimates of the impact of lifting U.S. sanctions on Cuba. I will focus my comments on the study’s use of this model. Let me say at the outset that, while I think that […]