English

By Tang Guhan

Most Americans do not want trade war, Thomas J. Sargent, the Nobel Prize Laureate in Economics in 2011 said on Sunday.

“Most Americans, including my friends and I, do not want a trade war. We thirst for free trade. Therefore we hope what is going on is just a threat in public,” said Thomas J. Sargent.

“My grandfathers have suffered from the Great Depression, and I want to figure out what caused it. Everyone is interested in Economics since everyone participates in economic activities daily. Economics is just great fun.” Sargent told this journalist from the China Fortune Media Group.

He specializes in the fields of macroeconomics, monetary economics and time series econometrics.

“When I was young, there were theories about how monetary and fiscal policy should be put together to manage the economy best, some friends and I spotted some problems in those theories and we figured out tools that could be used by central banks.” Sargent thought about his original intentions on economics studies.

Regarding the recent ongoing trade war, Sargent said he hopes that there is no trade war. “In the past, we have seen the United States using trade wars as a bargaining tool to put pressure on other countries to further reduce their trade barriers and open up their domestic markets. For instance, the US government has done this in the 80s and 90s with South Korea and Japan. The fact is the United States has done this repeatedly.

International trade is favorable for most people most of the time.”

According to Sargent’s observation, Trump is unusual, previous presidents did not use Twitter, and they did not use the kind of language that he uses. “He uses very informal, noisy kind of language; it is not the way governments usually communicate. It is hard to tell what he means.”

He added “Trump has said somethings and if he meant what he has said; he should go back to the macroeconomic notes. One example is he said we have a bilateral trade deficit with China and that means China is taking advantage of the US, which is not supposed to be in his notes on macroeconomics studies. The United States also has a trade surplus with other countries, but we are not taking advantage of them.”  

“From an economist’s perspective, if the US imposes tariffs with China and Europe, then it will hurt the US economy eventually since China and Europe could trade with each other. And if President Trump wants to protect inefficient domestic manufacturers, the hurt will far exceed what it helps,” Sargent explained.

 “I went to a couple of scientific conferences recently in China, and there are young Chinese scholars doing world-class work in my field, and I sat there taking notes. They are pushing the frontier. The number of Chinese scholars and scientists has surpassed the United States. I believe there will be more Chinese Nobel Prize Laureates in the future,” Sargent said.