The nominated CEA chair designate, Stephen Miran, has an exposition (h/t Politico)of how protectionism and a depreciating dollar can go together. As far as I can make out, it involves massive forex intervention, possibly sterilized, along with “user fees” on foreign held-UST’s…
Category Archives: Trade Policy
Intra-industry Trade Estimated
Oren Cass argues the idea of comparative advantage driving trade is outdated. I agree to a certain extent, but he doesn’t explain why. I’d say intra-industry trade (IIT) – a staple of academic research since the 1980s – is one reason, but that does not provide justification for protection. In fact, his ignorance of IIT suggests his case for protectionism is ill-founded.
When Econ 101 Isn’t Enough: Oren Cass on Trade
In Tuesday’s NYT, Oren Cass makes the case for protectionism.
Sentiment, Confidence, and Expectations: The Latter Is Down
U.Michigan consumer sentiment and Conference Board economic confidence rise. But expectations drop.
FT-Booth December Survey of Macroeconomists
2025 q4/q4 growth median forecast is 2.3%. Here’s a comparison against forecasts and nowcasts.
Trump: “Tariffs are going to make our country rich”
From Reuters:
In an interview with NBC’s Meet the Press that aired on Sunday, Trump said he did not believe that consumers ultimately pay the price of tariffs, adding “I think they’re beautiful.”
Did Wisconsin Manufacturing Thrive during Trump Trade War 1.0?
A retrospective:
All That Is Old Is New Again: Protection for Automobiles and Light Trucks
Forty years ago, I was working for Bob Crandall as an RA at Brookings, on how much the voluntary export restraints (VERs) added to the costs of a typical Japanese imported car. He found that number to be about $820 (a Datsun Stanza was about $6700 in 1981), and a comparable domestically produced car by about $370 (since the VER puts up a wall that allows domestic producers to raise prices). Today, according to Wells Fargo, the 25% tariffs would result in a vehicle assembled in Mexico or Canada to go up in price by $8000-$10000, while the average over all cars using imported parts will go up about $2100 (average car price in March 2024 is about $47000; a Ford F150 STX is about $42000).
Trump 25% Tariffs: Wisconsinites “to get it good and hard”?
President-elect Trump has mentioned a 25% tariff on Mexico and Canada. Time to think about how this would affect Wisconsin, a state that voted for Mr. Trump.
Further Dollar Appreciation: Implications
What else would one expect from expectations of expanded budget deficits, higher incipient inflation in the context of a Taylor rule reaction function, when the currency is a safe haven asset?