Mexico fact of the day

Or is it China fact of the day?

…each doubling of distance reduces trade by 90%.  For example, the distance between Los Angeles and Tijuana is about 150 miles.  If Tijuana were on the other side of the Pacific instead of across the border in Mexico and if this distance were increased to 10,000 miles, the amount of trade would drop by a factor of 44.  Other things held constant, expect the amount of commerce between a Shanghai resident and an LA residence to be only about 2% of the commerce between Tijuana and LA.

That is from Ed Leamer’s review of Tom Friedman, cited by Alex.


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