Working Paper
Does the choice of nominal anchor matter?
Gould, David M. (1999)
The conventional wisdom on nominal anchors is that exchange rate-based inflation stabilizations lead to economic booms while monetary-based stabilizations lead to recessions. This study finds strong evidence against this view. Rather than determining the path of economic growth, the choice of nominal anchor appears to be endogenously determined by the state of the economy. To peg or manage the exchange rate, a high level of international reserves is important, especially when a government's credibility is low after a period of high inflation. After controlling for the level of ...
Center for Latin America Working Papers , Paper 0499

Journal Article
The saving grace
Gould, David M.; Alm, Richard (1994-07)
Many economists agree that a country's rate of saving can be a key factor in the growth rate and living standards the country achieves. Analysts are less certain about which factors have positive and negative influences on saving, what role government should have in creating a better environment for saving, and the extent to which a country can offset the effects of low domestic saving by tapping into other countries' savings. ; Economists, bankers, and officials discussed these and other aspects of saving earlier this year at a symposium sponsored by the Federal Reserve Bank of Dallas. ...
Economic and Financial Policy Review , Issue Q III , Pages 43-52

Journal Article
GATT and the new protectionism
Gould, David M.; Gruben, William C. (1994-07)
The Uruguay Round of the General Agreement on Tariffs and Trade (GATT) is the first agreement of its kind that reduces or eliminates tariffs on many goods and addresses issues related to intellectual property rights, trade in services and agricultural subsidies. With good reason, it has generated much optimism about the future of free world trade. ; But does GATT's trade liberalization today mean that trade will remain liberalized tomorrow? Increasingly, governments are counteracting the perceived unfair trade practices of other nations with their own trade barriers. While concerns about ...
Economic and Financial Policy Review , Issue Q III , Pages 29-42

Journal Article
Mexico's crisis: looking back to assess the future
Gould, David M. (1995-04)
Mexico's most recent economic crisis took many in the international business community by surprise. In early December 1994, the Blue Chip consensus forecast for 1995 Mexican real GDP growth was 3.8 percent. A few weeks later, on December 20, the devaluation of the Mexican peso rocked international financial markets. What first appeared to be a minor correction in Mexico's nominal exchange rate quickly developed into a broader financial crunch felt in and outside Mexico. The Mexican government now expects the country's real GDP to fall about 3 percent in 1995; some private economists suggest ...
Economic and Financial Policy Review , Issue Q II , Pages 2-12

Journal Article
Trade deficits: causes and consequences
Ruffin, Roy J.; Gould, David M. (1996-10)
According to conventional wisdom, trade balances reflect a country's competitive strength-the lower the trade deficit, the stronger the country's industries and the higher its rate of economic growth. In this article, David Gould and Roy Ruffin review the history of the conventional wisdom and empirically examine whether large overall trade deficits or bilateral trade imbalances are associated with lower rates of economic growth. They find that, once the fundamental determinants of growth have been accounted for, trade imbalances have little effect on rates of economic growth.
Economic and Financial Policy Review , Issue Q IV , Pages 10-20

Journal Article
Free trade agreements and the credibility of trade reforms
Gould, David M. (1992-01)
David M. Gould argues that free trade agreements can help developing countries establish the credibility essential to successful trade reform. Credibility, he explains, is necessary if trade reform policies are to entice investment into the economic sectors where the liberalizing country has its greatest comparative advantage. As Gould explains, a free trade agreement enhances the credibility of trade reform policies by providing evidence of a government's long-term commitment to free trade and by discouraging protectionist policies in foreign markets. Gould concludes with an outlook for ...
Economic and Financial Policy Review , Issue Q I , Pages 17-27

Journal Article
What determines economic growth?
Ruffin, Roy J.; Gould, David M. (1993-04)
Does increased investment in education enhance long-run economic growth, or does it simply reduce current consumption? Will free trade stimulate growth, or will it merely increase imports? ; For a long time, economists relied on an economic growth theory that offered little scope for understanding long-run growth movements. Recently, however, the study of economic growth has been reinvigorated by new developments in theory and empirical findings that suggest how long-run growth evolves. ; Because economic growth determines whether our grandchildren will have better lives than ours or whether ...
Economic and Financial Policy Review , Issue Apr , Pages 25-40

Journal Article
The theory and practice of free trade
Ruffin, Roy J.; Gould, David M.; Woodbridge, Graeme L. (1993-12)
David M. Gould, Roy J. Ruffin, and Graeme L. Woodbridge argue that free trade is supported both by economic principles and evidence from countries that have followed open market policies. The authors demonstrate that the countries whose markets are the most open have higher real output and economic growth. ; The authors show that many arguments for protection obscure the benefits countries derive from international trade. High-wage countries not only can compete with low-wage countries, they dominate the world economic stage. Trade deficits or surpluses are not inherently bad or good, but ...
Economic and Financial Policy Review , Issue Dec , Pages 1-16

Journal Article
Has NAFTA changed North American trade?
Gould, David M. (1998-01-01)
The controversy over the success or failure of NAFTA is now bleeding over into discussion about the benefits of extending the trade accord to other countries in the Western Hemisphere. The NAFTA debate has typically focused on its impact on employment. But to understand the overall economic effects of NAFTA, it is important to first determine its impact on trade. In this article, David Gould explores NAFTA's effects on North America's trading patterns since its implementation in 1994. He finds that although it is difficult to distinguish any effect of NAFTA on trade between Canada and ...
Economic and Financial Policy Review , Issue Q 1 , Pages 12-23

Journal Article
Income taxes as reciprocal tariffs
Ruffin, Roy J.; Gould, David M.; Cox, W. Michael (1998-07)
This article shows the equivalence between tariffs on international trade and income taxation. Traditionally, income taxes have been seen as lowering society's output through the household's labor-leisure trade-off. Income taxes also reduce the degree to which individuals specialize in market activity, which is similar to the way countries respond to tariffs in international trade. Income taxes discourage individuals from specializing in activities that reflect their comparative advantage. In so doing, income taxes may have their most distorting effects, not by encouraging individuals to ...
Economic and Financial Policy Review , Issue Q III , Pages 2-9