MACRO NOTES 9/26

Restrictions on foreign trade and investment are the worst for economic growth
benefits of free trade, foreign investment:
-gains from competitive advantage (monopolies are bad)
-competition for domestic industry (spurs innovation, better service)
-technological spillovers, diffiusion
arguments on the other side:
-protect domestic industries so they can grow
-'neo-colonialism'

Economic growth-
-differences between countries
-growth over time- this means improvements in productivity
-in US, growth is ~2 or 3%/ year