Wednesday, February 3, 2016

PIIE Bashes Tufts for Its Competing Trade Study

The pro-traders at Peterson Institute for International Economics (PIIE) do not seem to like competition when it comes to free trade studies.

In a blog post, PIIE scholar Robert Lawrence defended his think tank's recent study on the Trans-Pacific Partnership (TPP), arguing that it is far superior than a Tufts University study on TPP that was just released but had very different findings.

Lawrence argues that the Tufts study, which estimates that TPP would reduce US income by 0.5%, reduce employment by almost half a million jobs, and increase income inequality, has faulty methodology.  Among other things, the PIIE study predicts that TPP would raise real incomes 0.5% by 2030.

Scholar Jared Bernstein, a former top economic adviser to Vice President Joe Biden and Senior Fellow at the Center on Budget and Policy Priorities (CBBP), defended the Tufts study at the National Press Club.

The PIIE study, entitled "The Economic Effects of the Trans-Pacific Partnership: New Estimates," was written by Peter Petri and Michael Plummer.  The Tufts study, entitled "Trading Down: Unemployment, Inequality and Other Risks of the Trans-Pacific Partnership Agreement," was written by Jeronim Capaldo and Alex Izurieta, with Jomo Kwame Sundaram.

The Tufts study cites a couple of PIIE studies in its reference section, and likewise, the PIIE study cites a couple of Tufts studies, including the most recent one.

Lawrence has been a Nonresident Senior Fellow at PIIE since 2001, and is the Albert L. Williams Professor of Trade and Investment at the John F. Kennedy School of Government at Harvard University.

Think Tank Watch is not taking sides, but we predict that both of the predictions in the study will be wrong.

Update:  Here is a piece in Salon entitled "TPP: Written By And For the Rich to Further Enrich Themselves at Our Expense," which blasts the PIIE report on TPP.