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Wolfgang Mayer
Pioneer in Politics of International Trade

Date: May 31, 2001
By: Carey Hoffman
Phone: (513) 556-1825
Photo by: Dottie Stover
Archive: General News

Wolfgang Mayer's research may be 99 percent theoretical, but its implications are as starkly real as the chaos that marked the World Trade Organization meeting in Seattle two years ago.

Wolfgang Mayer

Inside the meeting, international trade representatives worked out the complex details behind trade liberalization and negotiated new rounds of trade agreements. Outside, demonstrators rocked Seattle with furious and often-violent protests.

The WTO's stated objective was to negotiate reductions in trade barriers to raise the standard of living worldwide. The demonstrators, concerned about their own economic interests, strongly disagreed.

When it comes to dissecting and unraveling the intricate inner-workings behind these viewpoints, there are few better at it than Mayer, the David Sinton Professor of Economics at UC and this year's recipient of the George Rieveschl Jr. Award for Excellence in Scholarly or Creative Works.

For 30 years, Mayer has been at UC building a world of influence in the field of international trade theory. He has published extensively in the elite economic journals, including three articles that are considered among the landmark contributions in the field.

Colleagues from the foremost economic schools in the nation are quick to endorse him as among the top 10 researchers on international trade theory. "Except for major stars working on international trade located in the top half-dozen departments… I can not think of anyone in his age group who commands more respect in the profession," says Avinash Dixit, the John J.F. Sherrerd University Professor of Economics at Princeton University.

Wilfred Ethier, co-director of the International Economics Research Center at the University of Pennsylvania, offers a similar endorsement, adding Mayer "has helped powerfully to determine the present state of the (international trade) field."

Mayer, a native of Austria, was steered into international economics by a pair of teachers - Lawrence Krause of the Brookings Institution, who taught Mayer as an adjunct professor through the School of Advanced International Studies at Johns Hopkins University, and Winston Chang, Mayer's thesis advisor at SUNY-Buffalo.

"This exposure to two superior teachers of international economics influenced me in two ways," Mayer says. "It made me choose international trade theory as my area of specialization and convinced me of the importance of good teaching. I take my teaching very seriously."

Mayer first gained widespread attention in his field in 1974, with publication of an article, "Short-Run and Long-Run Equilibrium for a Small Open Economy." Economists recognize as a given that all attempts to liberalize trade are opposed by some groups. That's because even though negotiated trade liberalization raises the average standard of living for people in a country, there always are some losers.

Mayer's paper not only identifies winners and losers, but also "demonstrates how some short-term winners become long-run losers and vice-versa," he says. "This theoretical model has become a standard explanation for recent empirical observations on the changing distribution of income in the United States. The widening income gap between skilled and unskilled workers is interpreted as being partially due to trade liberalization and partially due to technological change."

The winners and losers of trade liberalization policies were again a Mayer subject in 1984, this time in the article "Endogenous Tariff Formation" that many view as his most important contribution. It was labeled "a home run" and "a classic article, widely cited as a major and pioneering contribution in the theory of political economy of trade policy, and has made Mayer a household word among students and scholars alike" by Jagdish Bhagwati, Arthur Lehman Professor of Economics and professor of political science at Columbia, and probably the leading voice among all academics for worldwide liberalization of trade.

Mayer's article explored the concept that actual choices of trade policy are not based on what is best for the 'average person,' but what is best for politically influential people. In linking international trade policies to the outcome of majority voting, Mayer helped launch one of the most promising economics research areas of the past decade, known as the Political Economy of International Trade.

"The subject is now one of the most active areas in economics," says Robert E. Baldwin, Hilldale Professor of Economics at the University of Wisconsin, "and a new journal, Economics and Politics, with Wolfgang as an associate editor, was started largely because of the interest stimulated by Mayer's paper."

The third of Mayer's three major contributions in the field was a 1981 article, "Theoretical Considerations of Negotiated Tariff Adjustments." It broke new ground in the field in demonstrating the potential gains from, as well as limits to, negotiated agreements.

"It shows why we have witnessed eight successful rounds of negotiated trade liberalization since World War II," Mayer says. "It also suggests that some tariff-cutting formulas adopted in these negotiations are effective in lowering trade barriers but are incapable of fully eliminating them."

Mayer continues in his zeal for uncovering the theories behind the broadening field of international trade. He was the president of the International Economics and Finance Society in 1996 and is a current member of the editorial boards for seven major economics journals. He is also a popular lecturer at institutions internationally.

Sourushe Zandvakili, Mayer's colleague in the department of economics, believes Mayer is an ideal Rieveschl winner. He says a number of top universities have tried to lure Mayer over the years, but "he has consistently demonstrated his loyalty and commitment to the economics department and the University of Cincinnati…(we) are incredibly fortunate in having this world-renowned scholar."

Find out about other award winners.


 
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