The following graph compares average tariff levels across countries.

One can take comfort from the fact US tariff rates are historically low.

I have two observations:

• We live in an era of global value chains, so that the value added has been chopped up and split across nations. In this context, a tariff of 10% on final value is a lot more than 10% on value added.
  
• This shock to global value chains comes on the back of an already stretched logistics network.
  

The latter point is highlighted by the following graph:

The latter is perhaps a temporary phenomenon, likely to end when the economy goes into recession. However, the former is likely more persistent.

Global value chains have been built up over decades; rejiggering these chains to accommodate tariffs of indefinite duration is sure to be disruptive, possibly inflationary (although that depends on monetary policy).

That’s a title I borrowed from a paper by Barry Eichengreen; the actual title is “International environment and US monetary policy: a textual analysis” written by Laurent Ferrara and Charles-Emmanuel Teuf:

What role does the international environment play in shaping US monetary policy decisions? To measure its influence, we construct an international indicator extracted from minutes of Fed monetary policy committee meetings.

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That’s the caption to this graph:
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The International Affairs Fellowship (IAF) in International Economics, sponsored by Kimberly Querrey, offers business economists as well as university-based economics scholars hands-on experience in the U.S. government to expand their range of thinking and work on international economic policy. Possible host placements for the fellowship appointment include but are not limited to the U.S. Department of the Treasury, U.S. Department of Commerce, the Federal Reserve Bank, and relevant parts of the U.S. Department of State and the White House [so the Fed, the IMF, the World Bank, the Treasury or any other policy institution are also possibilities]. The IAF in International Economics aims to enrich the teaching, scholarship, and research of academics, inform the practice of business economists, and expose policymakers to cutting edge scholarly research and academic debates.

For more information, see here.

Following up on yesterday’s tweets on estimates of excess mortality, official statement on twitter:

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From tweets [1] [2]:

“When Trump visited the island territory last October, OFFICIALS told him in a briefing 16 PEOPLE had died from Maria.” The Washington Post. This was long AFTER the hurricane took place. Over many months it went to 64 PEOPLE. Then, like magic, “3000 PEOPLE KILLED.” They hired……..GWU Research to tell them how many people had died in Puerto Rico (how would they not know this?). This method was never done with previous hurricanes because other jurisdictions know how many people were killed. FIFTY TIMES LAST ORIGINAL NUMBER – NO WAY!

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From Mr. Trump, this morning:

3000 people did not die in the two hurricanes that hit Puerto Rico. When I left the Island, AFTER the storm had hit, they had anywhere from 6 to 18 deaths. As time went by it did not go up by much. Then, a long time later, they started to report really large numbers, like 3000……..This was done by the Democrats in order to make me look as bad as possible when I was successfully raising Billions of Dollars to help rebuild Puerto Rico. If a person died for any reason, like old age, just add them onto the list. Bad politics. I love Puerto Rico!

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Following up on examples of the incredible and unsung success of the recovery effort in Puerto Rico described by Mr. Trump, from Begnaud/CBSNews:

What may be millions of water bottles. meant for victims of Hurricane Maria, have been sitting on a runway in Ceiba, Puerto Rico, since last year, according to @FEMA, which confirmed the news to me, late tonight, after pictures, posted today on social media, went viral.

If 2975 dead is a success, what does a failure look like?

But Mr. Trump did pass out some paper towel rolls.

A commentator [1] has recently concluded that excess mortality due to austerity in Puerto Rico exceeds that attributable to Hurricane Maria and its aftermath. I take issue with that conclusion.

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Hiro Ito has updated our de jure financial openness index through 2016, with all the data located at here, in Excel and Stata files.

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