The Benefits of Free Trade to U.S. Consumers

Much of the literature concerning trade liberalization focuses on estimating the effect of increased trade on aggregate economic indicators, such as the growth in GDP per capita. Although there is a general recognition that trade benefits consumers, there is little research that estimates the direct...

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Bibliographic Details
Published in:Business economics (Cleveland, Ohio) Ohio), 2005-07, Vol.40 (3), p.41-51
Main Authors: Langenfeld, James, Nieberding, James
Format: Article
Language:English
Subjects:
Competition
Consumers
Costs
Disposable income
Economic impact
Economists
Estimates
Exports
Free trade
GDP
Globalization
Gross Domestic Product
Households
Income
International trade
Prices
Protectionism
Specialization
Studies
Tariffs
Trade liberalization
Trade restrictions
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Summary:Much of the literature concerning trade liberalization focuses on estimating the effect of increased trade on aggregate economic indicators, such as the growth in GDP per capita. Although there is a general recognition that trade benefits consumers, there is little research that estimates the direct impact of increased trade on U.S. consumers. We take broad measures of the economic impact of trade liberalization from three authoritative studies and apply economic principles to estimate the impact of increased trade on the income of U.S. households. We find, for example, that U.S. households gained about $2,500 in 2002 from increased trade, or the equivalent of almost six percent of the median household income in that year. We believe these results should be given weight in the ongoing debate regarding the effect of globalization.Business Economics (2005) 40, 41–51; doi:10.2145/20050306
ISSN:0007-666X
1554-432X
DOI:10.2145/20050306