Econometrically Assessing the President’s Tax Plan

Well, we don’t know for certain what he’s going to announce (and maybe even he doesn’t know what he will) — but according to Bloomberg…

President Donald Trump plans to propose a 10 percent tax on more than $2.6 trillion in earnings that U.S. companies have stockpiled offshore, said a White House official familiar with the president’s tax plans.

Proceeds from the so-called “repatriation tax” would represent a one-time source of sorely needed revenue, which could offset some of the deep tax cuts Trump has proposed for businesses — or could be devoted toward popular, bipartisan initiatives, like infrastructure spending.

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Doug Irwin on “The False Promise of Protectionism”

Why Trump’s Trade Policy Could Backfire

That’s a new Foreign Affairs essay out today by Doug Irwin, Professor of Economics at Dartmouth College:

Although Trump’s professed goal is to “get a better deal” on trade, his brand of economic nationalism is just one step away from old-fashioned protectionism. The president claimed that “protection will lead to great prosperity and strength.” Yet the opposite is true. An “America first” trade policy would do nothing to create new manufacturing jobs or narrow the trade deficit, the gap between imports and exports. Instead, it risks triggering a global trade war that would prove damaging to all countries. A slide toward protectionism would also undermine the institutions that the United States has long worked to support, such as the World Trade Organization (WTO), which have made meaningful contributions to global peace and prosperity.

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Minnesota Employment Growth Accelerates Relative to Wisconsin (Again)

Wisconsin and Minnesota released March employment figures today. Here, without comment (as none are needed) are year-on-year growth rates relative to the US average for Minnesota (blue) and Wisconsin (red).



Figure 1: 12 month log-differences of nonfarm payroll employment for Minnesota (blue) and Wisconsin (red), relative to US. Green shading denotes sample not updated to reflect QCEW-related benchmarking. Source: WI DWD, MN DEED, BLS, and author’s calculations.

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China’s tetralemma

Many countries have three policy objectives: (1) being able to set their own monetary policy, in order to keep their own inflation and unemployment at desired levels; (2) having a stable exchange rate, in order to avoid disruptive shifts in exports or imports; and (3) allowing free capital flows, in order to help the country’s citizens and firms find the most efficient sources and uses of capital. But the famous policy trilemma of international economics claims that any country is going to be forced to give up on one of those three goals.
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Event Analysis: How Not to Conduct Public Relations

United Airlines had security drag a passenger off an airplane on Sunday. The CEO of United did not apologize until just a little while ago. Story and video here.

It’s apparent that the previous statement (discussion here) which did not include an apology was not having the desired effect.



Source: Reuters, accessed noon CST 11 April 2017.