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gregip.bsky.social @gregip.bsky.social · 14/02/2025

Trump isn't responsible for the ~3% inflation he inherited. But it's a problem for him b/c tariffs, maybe tax cuts could keep it above Fed's 2% target. In 1st term, w/ core inflation <2%, tariffs & tax cuts helped Fed meet rather than miss 2% target. My column: www.wsj.com/economy/infl...

wsj.com

Inflation Helped Trump Get Elected. Now It’s His Problem.

The president’s team blames his predecessor for stubborn inflation, but Trump’s own agenda could make it harder to defeat.

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gregip.bsky.social @gregip.bsky.social · 03/02/2025

Trump's tariffs spell end of postwar consensus of economic cooperation. Next: continuous trade war driven not by alliances and ideology, but the priorities of the day. The winner is the one who can inflict, and withstand, the most economic pain. My latest. www.wsj.com/economy/trad...

wsj.com

Trump’s Tariffs Usher In New Trade Wars. The Ultimate Goal Remains Unclear.

The president’s trade assault, which makes no distinction between ally and adversary, is an assertion of U.S. dominance with significant risks.

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Douglas Irwin @douglasirwin.bsky.social · 02/02/2025

If there is any doubt that tariffs are passed through to consumers, the cost of propane to heat my house just went up by the amount of the tariff

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gregip.bsky.social @gregip.bsky.social · 14/12/2024

... inward, to be satisfied by idle domestic resources. (By contrast, had the US still been at full employment, there would be no idle resources to satsify this tariff-induced demand; you'd get inflation, or a reduction in output elsewhere in the economy).

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gregip.bsky.social @gregip.bsky.social · 14/12/2024

So another way of saying this (in more conventional terms) is: the U.S. could reduce its indebtedness through fiscal austerity; this would normally lead to underemployment. But it can neutralizes that by raising tariffs, effectively directing some of the demand now satisifed by imports ...

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gregip.bsky.social @gregip.bsky.social · 13/12/2024

but if you're at full employment (an assumption underlying a lot of trade models), tariffs direct productive resources from one sector to another, so you're less likely to get higher absolute consumption.

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gregip.bsky.social @gregip.bsky.social · 13/12/2024

I infer that for tariffs to raise overall consumption through the mechanism you describe, i.e. boosting production, the host country would have to be below full employment, i.e. there would have to be idle resources that can be put to use in the new production...

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gregip.bsky.social @gregip.bsky.social · 07/12/2024

on first read it feels like a frank and logical assessment of China's need to boost demand by shifting income to the household sector. but his policy conclusions - more spending on industrial policy and infrastructure - are really boosting the supply side further

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gregip.bsky.social @gregip.bsky.social · 04/12/2024

Robert Lighthizer won't join Trump's administration after declining to join the internal battle for a top cabinet level position, WSJ's Brian Schwartz reports. His absence could set back Trump’s ambitions. www.wsj.com/politics/pol...

wsj.com

How Robert Lighthizer Got Shut Out of Trump’s Cabinet

Donald Trump’s former trade chief was hoping to run Treasury or the Commerce Department, but his prospects faded as other candidates emerged.

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gregip.bsky.social @gregip.bsky.social · 01/12/2024

I agree. My take: If lower inflows are caused by higher U.S. saving/lower investment, rates should fall. But if caused by exogenous decline in demand for dollar as a reserve asset, then marginal buyer of UST becomes more price sensitive and yields (esp term premium) should rise.

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gregip.bsky.social @gregip.bsky.social · 01/12/2024

Trump's defense of the dollar's reserve currency status is disconsonant because it's a key reason for the demand for US dollar assets that causes our structural trade deficit. (Triffin dilemma, anyone?) Losing that status would mean a lower dollar, higher interest rates, and smaller trade deficit.

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Jason Furman @jasonfurman.bsky.social · 27/11/2024

Core PCE came in high (as expected). The last mile thesis has gained strength over the last several months as 12-month core PCE is now up 2.8%. You might say that includes outdated, lagged data. But 3-month is also a 2.8% annual rate.

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gregip.bsky.social @gregip.bsky.social · 21/11/2024

Trump's 2 key economic planks, tax cuts/dereg to bolster growth; and tariffs to reduce trade deficit & bring back factory jobs, are in conflict. Trump can prioritize stronger growth or a smaller trade deficit , but not both. What Treasury pick means for the clash. www.wsj.com/economy/trum...

wsj.com

Trump’s Growth and Trade Agendas Are at Odds. His Economic Team Will Point to the Winner.

Tax cuts, deregulation and budget deficits would push up the dollar and worsen the trade deficit, while steep tariffs would undermine growth.

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Neil Irwin @neilirwin.bsky.social · 19/11/2024

I'm happy for @jeannasmialek.bsky.social and @jimtankersley.bsky.social but the DC economic policy press corps is taking a real hit here. www.nytco.com/press/jeanna...

nytco.com

Jeanna Smialek and Jim Tankersley Join International | The New York Times Company

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gregip.bsky.social @gregip.bsky.social · 19/11/2024

The horizontal bars represent the percentage saying "gotten better" minus the percentage saying "gotten worse." The first bar (for US) is the net answer across all battleground states on the US economy. For the states, it represents the net answer for each state.

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gregip.bsky.social @gregip.bsky.social · 19/11/2024

Trump inherits a remarkable economy. JP Morgan: "US real GDP currently stands nearly 4%-pts above its pre-pandemic potential path, while the RoW (rest of the world) maintains a greater than 1%-pt negative gap."

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gregip.bsky.social @gregip.bsky.social · 15/11/2024

I talk with Noel King at Vox about tariffs: what Trump is trying to achieve, what we learned from his first term, how they might be implemented this time, and what the reaction might be. podcasts.apple.com/us/podcast/t...

podcasts.apple.com

There's a new tariff in town

Podcast Episode · Today, Explained · 11/14/2024 · 28m

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gregip.bsky.social @gregip.bsky.social · 15/11/2024

Did Harris lose because of economics or culture? I argue here economics. In UK, France, Japan, ihflation was #1 issue, like in U.S., and ruling parties in all lost despite changing leaders. My colleague Aaron Zitner makes the competing argument for culture. Read & vote www.wsj.com/politics/ele...

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Jason Furman @jasonfurman.bsky.social · 13/11/2024

The CPI-based Ecumenical Underlying Inflation measure was 2.5% in October, up from 2.2% in August and 2.4% in September. This is median of 21 measures. And FWIW, roughly matches my own sense of underlying inflation (in previous months my judgment was higher than this measure).

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gregip.bsky.social @gregip.bsky.social · 06/11/2023

More of an example than an explanation. I wrote about the divergence here; I think the economic pessimism is referred pain from pessimism about the world in general. www.wsj.com/economy/the-...

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gregip.bsky.social @gregip.bsky.social · 03/11/2023

Is Globalization in Decline? A New Number Contradicts the Consensus. Instead of looking at the dollar value of trade, focus on how many tons of stuff get shipped how far, by Josh Zumbrun www.wsj.com/economy/glob...

wsj.com

Is Globalization in Decline? A New Number Contradicts the Consensus

Instead of looking at the dollar value of trade, focus on how many tons of stuff get shipped how far

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Ben Casselman @bencasselman.bsky.social · 03/11/2023

Layoffs remain very low. But for people who are out of work, it's getting harder to find a job. The job-finding rate is roughly back to where it was before the pandemic (which was still a very strong job market). And the average duration of unemployment has drifted up a bit.

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gregip.bsky.social @gregip.bsky.social · 02/11/2023

This is the streaming equivalent of the potato chip company shrinking the size of the bag but keeping the price the same.

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gregip.bsky.social @gregip.bsky.social · 02/11/2023

Why Fed chair Powell isn't bothered by what looks like above potential growth: potential has moved up. At least temporarily. "Fed Takes Heart in a Supply-Side Boom" wsj.com/economy/cent...

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gregip.bsky.social @gregip.bsky.social · 01/11/2023

GDP and jobs are above their prepandemic trend. Inflation is falling, real wages have recovered, real wealth is up. Why so much economic pessimism? Could it be "referred pain"? My latest. www.wsj.com/economy/the-...

wsj.com

The Economy Is Great. Why Are Americans in Such a Rotten Mood?

Lingering inflation can’t explain all of the unhappiness; maybe it is referred pain from the wider world

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gregip.bsky.social @gregip.bsky.social · 27/10/2023

Inflation is also higher than before Covid so there's at least a prima facie case that today's level of GDP is above potential, although CBO's own estimates don't show that.

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Paul Krugman @pkrugman.bsky.social · 26/10/2023

What we talk about when we talk about Long Transitory

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gregip.bsky.social @gregip.bsky.social · 25/10/2023

Fed chairmen used to lecture Congress and presidents on the deficit. Those days are over. Even as deficits drive up bond yields and roil markets, Powell refuses to offer advice, in contrast to 2020 when he advocated for more stimulus. My column. www.wsj.com/economy/cent...

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