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In the latest EconTalk, “The Economics of Tariffs and Trade (with Doug Irwin)“, May 5, 2025, Russ Roberts interviews one of the top trade economists in the world, Doug Irwin. Doug recently completed an entry titled “Tariffs” for my Concise Encyclopedia of Economics. Early in the interview, he and Russ talk about trade deficits. Like .. MORE
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International Trade
Early in his EconTalk interview with Douglas Irwin, Russ Roberts says: But I just want to pose the question: Suppose they didn’t come back. Suppose foreigners sold us cars and all kinds of things, and we sent them dollars. Americans sent them dollars. And the foreigners really liked the way the dollars looked, so they put them .. MORE
Free Markets
Among the smarter center-left pundits, we are seeing signs of what might be called a revival of neoliberalism. Here I’m thinking of people like Matt Yglesias, Ezra Klein, Derek Thompson and Noah Smith. (They might not like that label, but I’m more concerned with content than terminology.) Noah Smith recently provided a good explanation of .. MORE
Economic Education
Question: Suppose the market price of gasoline is $5.00 per gallon. Politicians, responding to their constituents who believe that such a price is outrageous, impose a price control of $2.00 per gallon. At this price, you want to buy 9 gallons of gasoline per week but gas stations are now only willing to sell you .. MORE
Economic Growth
Scott Sumner’s post Tariffs and the Economy observes that the most important effects of tariffs are not big, dramatic, or immediate ones. They’re the hits to long-term growth as arrangements gradually become less efficient and lower growth rates compound. The lack of an immediate, catastrophic outcome could be used as an excuse to dismiss tariffs .. MORE
Adam Smith
An eight-second Wall Street Journal video clip illustrates the old-time, labor-intensive manufacturing that some, including the two last US presidents, want to bring back to America by using state coercion and threats (“Trump’s Tariffs Are Lifting Some U.S. Manufacturers,” May 4, 2025). The featured worker in the video clip seems to be endlessly repeating two .. MORE
International Macroeconomics
No. The Net International Investment Position (NIIP) is a simple accounting concept. It is the total value of foreign assets owned by Americans in other countries minus the total US assets owned by foreigners. A positive number means that the value (but not the returns) of US-owned foreign assets is greater than the value (but .. MORE
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May the fourth be with you. Understanding the Effects of Tariffs by Kyle Pomerleau and Erica York, AEI Economic Perspectives, April 23, 2025. Excerpt: In 2023, the US applied a simple average tariff of 3.4 percent on imports; that’s the result of 734 distinct tariff rates, the highest of which is 350 percent on some .. MORE
Economic History
When the Civil War broke out in 1861, the Confederacy, like any government in any situation, had three sources of money: taxing, borrowing, or printing. Taxing The Confederacy struggled throughout to extract taxes from its citizens. “Congress enacted a tiny tariff in 1861,” historian James M. McPherson writes, “but it brought in only $3.5 million .. MORE
Books: Reviews and Suggested Readings
In Barry Lam’s Fewer Rules, Better People: The Case for Discretion, the largest portion of his examples of real-world cases of rules and discretion is framed in terms of sports competition, or law enforcement. Here, I look at how he explores rules and discretion in law enforcement. He identifies two different forms of discretion in .. MORE
A Book Review of Common Law Liberalism: A New Theory of the Libertarian Society, by John Hasnas.1 “Look around.” John Hasnas’s main political advice may sound extravagant. But his remarkable book, Common Law Liberalism,1 is a caveat against “inattentional blindness” of the sort social scientists often fall victim to—and those who like flirting with theory .. MORE
Under a gold standard, government bonds are nearly free of inflation risk but not of default risk. Under a fiat standard, the reverse is true. ——White, Lawrence H. Better Money: Gold Fiat or Bitcoin? (pp. 214-215).1 In his new book, Lawrence H. White compares three possible monetary systems: a gold standard, a fiat money standard, .. MORE
Book Review of What We Owe the Future, by William MacAskill.1 An issue that has long divided scholars is the question of how much weight to give to the interests of future generations, especially when making decisions of significant public importance. On one side of this issue there have been those like the University of .. MORE
James Buchanan This is Part II of a two-part essay: The Past, Present, and Future of Public Choice: Part I The Past, Present, and Future of Public Choice: Part II As mentioned in the previous essay, the rise of Politics, Philosophy, and Economics (PPE) programs since 2013 has been significant, including the establishment of a .. MORE
Interesting analysis!
Pierre Lemieux, May 4