Paul Krugman discusses the growth of world trade and its implications. He notes that globalization has significantly changed the American economy over the past 25 years, increasing the share of trade in GDP from 4.7% in 1960 to 11.4% in 1994. While trade growth has been substantial in many countries, it has not been as dramatic as in the U.S. China, for example, has seen a dramatic increase in trade, now exporting 25% of its GDP. Krugman highlights that the growth of world trade is a contentious issue, with disagreements among economists about the relative importance of trade and technological change in causing wage inequality. He also notes the gap between professional economists and the broader public, with many non-economists misunderstanding the complexities of international trade. Krugman argues that the growth of world trade is not just a result of technological advancements but also political factors, such as the removal of protectionist measures after World War II. He also discusses the role of political factors in trade liberalization, noting that the general profile of world protectionism has been the inverse of that of world trade. Krugman also discusses the new aspects of modern world trade, including intra-trade, the slicing up of the value chain, the emergence of supertrading nations, and the rise of low-wage manufacturing exports from newly industrializing economies (NIEs). He argues that these new aspects have significant implications for labor markets, particularly in the OECD. Krugman presents a stylized model of global trade, employment, and wages, focusing on the effects of NIE trade in manufactured goods. He notes that the growth of NIE exports has coincided with some disturbing trends in OECD labor markets, including a sharp rise in wage inequality and unemployment. He argues that the impact of NIE exports on OECD labor markets is complex and requires a general-equilibrium approach to understand. Krugman concludes that the growth of world trade is a complex issue with significant implications for economic policy and labor markets. He emphasizes the importance of understanding the interactions between trade, wages, and employment in a global context.Paul Krugman discusses the growth of world trade and its implications. He notes that globalization has significantly changed the American economy over the past 25 years, increasing the share of trade in GDP from 4.7% in 1960 to 11.4% in 1994. While trade growth has been substantial in many countries, it has not been as dramatic as in the U.S. China, for example, has seen a dramatic increase in trade, now exporting 25% of its GDP. Krugman highlights that the growth of world trade is a contentious issue, with disagreements among economists about the relative importance of trade and technological change in causing wage inequality. He also notes the gap between professional economists and the broader public, with many non-economists misunderstanding the complexities of international trade. Krugman argues that the growth of world trade is not just a result of technological advancements but also political factors, such as the removal of protectionist measures after World War II. He also discusses the role of political factors in trade liberalization, noting that the general profile of world protectionism has been the inverse of that of world trade. Krugman also discusses the new aspects of modern world trade, including intra-trade, the slicing up of the value chain, the emergence of supertrading nations, and the rise of low-wage manufacturing exports from newly industrializing economies (NIEs). He argues that these new aspects have significant implications for labor markets, particularly in the OECD. Krugman presents a stylized model of global trade, employment, and wages, focusing on the effects of NIE trade in manufactured goods. He notes that the growth of NIE exports has coincided with some disturbing trends in OECD labor markets, including a sharp rise in wage inequality and unemployment. He argues that the impact of NIE exports on OECD labor markets is complex and requires a general-equilibrium approach to understand. Krugman concludes that the growth of world trade is a complex issue with significant implications for economic policy and labor markets. He emphasizes the importance of understanding the interactions between trade, wages, and employment in a global context.