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Bonus Quotation of the Day…

… is from page 325 of Columbia University economics professor Arvind Panagariya’s forthcoming book, Free Trade and Prosperity:

A common argument made by critics is that if we take a snapshot of a rapidly growing economy such as Taiwan in the 1960s or China in the 1980s, we would observe continuing high levels of protection. This raises the question of why protection rather than liberalization might not be the source of the rapid growth. The answer to this misleading critique has two parts. First, in both cases, liberalization preceded or accompanied growth acceleration. If the countries still looked highly protected, it is because they began too far away from the free trade position and too close to autarky. Second, if protection was indeed the source of rapid growth in these cases, its reduction during the following years should have led to a decline in the growth rate. But the opposite was observed when Taiwan in the 1970s and China in the 1990s and 2000s opened their economies further.