The impact of the Trump trade war
We analyze the short-run impacts of the 2018 trade war on the U.S. economy. We estimate import demand and export supply elasticities using changes in U.S. and retaliatory war tariffs over time. Imports from targeted countries decline 31.5% within products, while targeted U.S. exports fall 9.5%. We find complete pass-through of U.S. tariffs to variety-level import prices, and compute the aggregate and regional impacts of the war in a general equilibrium framework that matches these elasticities. Annual losses from higher costs of imports are $68.8 billion (0.37% of GDP). After accounting for higher tariff revenue and gains to domestic producers from higher prices, the aggregate welfare loss is $6.4 billion (0.03% of GDP). U.S. tariffs favored sectors located in politically competitive counties, suggesting an ex ante rationale for the tariffs, but retaliatory tariffs offset the benefits to these counties. Tradeable-sector workers in heavily Republican counties are the most negatively affected by the trade war.
Here is the full paper, by Pablo D. Fajgelbaum, Pinelopi K. Goldberg, Patrick J. Kennedy, and Amit K. Khandelwal. Full pass-through, of course, means that monopoly in these markets is likely not such a big deal.
Sunday assorted links
A modest proposal
So let me offer this modest proposal: When a child receives government assistance, we should deduct the cost from his parents’ future Social Security benefits. If one parent fails to provide child support, we should deduct the cost from his Social Security benefits alone; otherwise, the parents split the cost. Administratively, this seems quite manageable. Of course, this modest proposal means that many deadbeat dads will have to endure late retirement, but that seems a lot fairer than burdening taxpayers.
That is from Bryan Caplan.
Differences in the Quran treatment of the themes from the Book of Genesis
1. There are more angels.
2. Satan plays a larger role.
3. There is virtually no literary suspense.
4. Adam is not made in God’s image.
5. There is considerably less complexity of narrative perspective.
6. Allah does not speak directly, rather it is all coming from Allah.
7. Noah is more of a prophet of doom, and Abraham (“the first Muslim”) is a more important figure.
8. The Abraham story is more central.
9. Isaac is aware that he is slated for sacrifice, and accepts his fate. (That he is not killed of course you can think of as an “alternative” to the Christ story, namely that the blessed do not have to undergo a brutal, ugly death.)
10. The covenant with God is not national or regional in its origins.
For those points I drew upon my interpretations of Jack Miles, God in the Qu’ran, among other sources.
The polity that is Oregon
Oregon Gov. Kate Brown signed into law a first-in-the-nation rent control bill Thursday and called on the Legislature to turn its attention to funding new housing initiatives.
Because of an emergency clause, Senate Bill 608′s rent control and eviction protections go into effect immediately.
The details are somewhat less bad than that may sound at first:
The law caps annual rent increases to 7 percent plus inflation throughout the state, which amounts to a limit of just over 10 percent this year. Annual increases in the Consumer Price Index, a measure of inflation, for Western states has ranged from just under 1 percent to 3.6 percent over the past five years.
The rent increase restrictions exempt new construction for 15 years, and landlords may raise rent without any cap if renters leave of their own accord. Subsidized rent also is exempt.
Here is the full story, via Mike Tamada.
My Rubin Report interview
Saturday assorted links
1. The old blogosphere vs. current social media. (He should have blogged it, however.)
2. The Singapore chewing gum ban.
3. Training teachers how to shoot.
4. Hidden insults in an on-line Taiwanese game?
5. The golden age of the piano is now.
6. Ethiopia’s coffee ritual is being exported to China and Japan.
If you fear NIMBY, should you favor more immigration?
Many of today’s capitalists also want more immigration. Ocasio-Cortez also supports more immigration, which is confusing. According to Ricardo’s economic theory, expanding the population in the current environment will increase the cost of housing, health care, and higher education, just as it increased the price of wheat in the 19th century. This would hurt workers.
That is from Ronald W. Dworkin, “The New Rentiers: Ricardo Redux,” in the March/April 2019 issue of The American Interest, not yet on-line.
In general, facing up to the policy implications of a strict NIMBY world is something few wish to do. For instance, it seems to me that increases in the minimum wage, even if they initially went along Card-Krueger lines, would end up being passed along as greater benefits to landlords. All sorts of other attempts at amelioration could backfire as well.
Or do we live in some kind of intermediate NIMBY world on the coasts, where you get to complain about the land restrictions, but don’t have to live with the policy implications of strict NIMBY? Maybe so! But if so, I would like to see this argued for at more length.
The Mormon asymptote?
…compared to some other religions, Mormonism is not doing too badly. Mormonism’s US growth rate of .75 percent in 2017 — kept in positive territory by still-higher-than-average fertility among Mormons — is actually somewhat enviable when compared to, for example, the once-thriving Southern Baptists, who have bled out more than a million members in the last ten years. Mormonism is not yet declining in membership, but it has entered a period of decelerated growth. In terms of congregational expansion, the LDS Church in the United States added only sixty-five new congregations in 2016, for an increase of half a percentage point. In 2017, the church created 184 new wards and branches in the United States, but 184 units also closed, resulting in no net gain at all.
By some estimates (p.7), only about 30 percent of young single Mormons in the United States go to church regularly. The idea of the Mormon mission, however, is rising in import:
More than half of Mormon Millennials have served a full-time mission (55 percent), which is clearly the highest proportion of any generation; among GenXers, 40 percent served, and in the Boomer/Silent generation, it was 28 percent.
In contrast, “returning to the temple on behalf of the deceased” is falling (p.54).
Mormons are about a third more likely to be married than the general U.S. population, 66 to 48 percent. But note that 23 percent of Mormon Millennials admit to having a tattoo, against a recommended rate of zero (p.162).
And ex-Mormon snowflakes seem to be proliferating. For GenX, the single biggest reason giving for leaving the church was “Stopped believing there was one church”. For Millennials, it is (sadly) “Felt judged or misunderstood.”
That is all from the new and excellent Jana Riess, The Next Mormons: How Millennials are Changing the LDS Church.
Oxford University Press also sent me a copy of J. Brian O’Roark Why Superman Doesn’t Take Over the World: What Superheroes Can Tell us About Economics, which I have not yet read.
Hayek auction markets in everything
Friedrich Hayek’s personal copy of Adam Smith’s Wealth of Nations, complete with pencilled annotations by the champion of free market economics, is to go on sale as part of a trove of personal items being sold by Hayek’s family. Hayek’s typewriter, writing desk, photo albums, passports, a speech signed by former prime minister Margaret Thatcher and a set of cufflinks given to him by ex-US president Ronald Reagan are among the items set to go under the hammer in an online sale at Sotheby’s later this month.
That is from James Pickford at the FT, the Smith copy is estimated to go for £3,000 to £5,000, plus buyer’s premium of course.
Friday assorted links
1. Negotiating with North Korea.
2. A tree with its own zip code.
3. The Straussian theory of employee feedback within corporations. I don’t quite agree, but interesting nonetheless.
4. MIE: where does fake movie money come from?
5. Is your data worth anything?
6. TikTok now at one billion downloads.
7. “At 42, Bickert is currently one of only a handful of people, along with her counterparts at Google, with real power to dictate free-speech norms for the entire world.” Oops, correct link for #7 is here.
What are hologram-based concerts really like?
The technology behind these posthumous encores is complex; the truth is that holograms as many imagine them – exact 3-D digital replicas of humans, constructed from video footage – do not exist. Instead, as Martin Tudor of Base Hologram explains of their own process, “We start with a body double who works closely with our director to choreograph the performances and then we take the results of that and go to work on it digitally.” So while Mitch Winehouse insists that the tour will be a chance for audiences to see the “real” her, what they’ll actually be presented with is footage of a lookalike actress with a CGI 3-D mask on. Unlike Winehouse, who appeared to dislike touring, this digital spectre will be controlled and compliant. Recordings of the voice may belong to the original singer, but the physicality of the performance will be wholly manufactured.
Which changes in economic policy are actually going to happen?
That is the topic of my latest Bloomberg column, here is one excerpt:
A second pattern from U.S. history is that the federal government generally likes to hand out benefits perceived as “free.” This dates at least as far back as the establishment of Social Security in the Great Depression, when the initial benefit recipients weren’t paying taxes into the system.
I therefore expect federal government action on subsidized child care, preschool programs and paid family leave, all financed by increases in budget deficits rather than higher taxes. Such policies would hand out goodies to millions of families, and appeal to women in particular.
Again, ask the basic questions. Is there “pro-family” rhetoric emanating from both left and right? Yes, whether it is the socialist proposals from Matt Bruenig or paid family leave bills introduced by congressional Republicans. Can you imagine members from both parties claiming these issues as their own? Yes. Is there the possibility of free goodies being handed out? Again, yes, as the national debt held by the public is now over $16 trillion.
I consider also tech regulation, trade issues, immigration, Medicare for All, and the Green New Deal, with only the first of those likely to see big changes.
In a world of smartphones, should pedestrians have fewer rights?
Pedestrian deaths plummeted from 6,482 to 4,109 from 1990 to 2009, federal figures show.
Fatalities then rose 45% from 2009 to 2017.
Link here. Who is the least cost avoider here? Here is my earlier post on liability and United Airlines. And here is another Coasean parable: “Guy Asks If He’s Wrong To Make Obese Man Pay Him $150 For Taking Up Part Of His Seat On A 5-Hour Flight.”
Thursday assorted links
2. Popular culture has stopped warning us against the dangers of nuclear devastation.
3. For economists: “receiving an education from a top 20 ranked university reduces the need to self-symbolize even when the scholars work for a non-top 20 university after earning the doctorate…academic maturity shows a tendency (albeit not a robust one) to reduce the need to self-symbolize.” Link here.
4. Jonah Goldberg and Steve Hayes to start a new conservative media company (they are looking for investors).
6. What a North Korean official says (NYT). A good piece.