We study the macroeconomic effects of tariff policy using U.S. historical data from 1840–2024. We construct a narrative series of plausibly exogenous tariff changes based on major legislative actions, multilateral negotiations, and temporary surcharges– and use it as an instrument to identify a structural tariff shock. Tariff increases are consistently contractionary: imports fall sharply, exports…
The Macroeconomic Effects of Tariffs: Evidence From U.S. Historical Data
The Macroeconomic Effects of Tariffs: Evidence From U.S. Historical Data
31 Dec 2025 Leave a comment
in applied price theory, econometerics, economic history, international economics Tags: free trade, tariffs
Noah Smith Is Mistaken About Trade Deficits
31 Dec 2025 Leave a comment
in applied price theory, international economics
TweetHere’s a letter to a long-time, friendly patron of Café Hayek. Pete: Thanks for sending along Noah Smith’s Christmas-eve post titled “Why Europe should resist the Second China Shock.” Like you, I disagree with much that’s in this post. Especially disappointing is Smith writing this: “That’s what a trade deficit is – the writing of…
Noah Smith Is Mistaken About Trade Deficits
The 2023 climate event revealed the greatest failure of climate science
30 Dec 2025 1 Comment
in economic history, economics of climate change, energy economics, environmental economics, environmentalism, global warming
by Javier Vinos We have been fortunate to witness the largest climate event to occur on the planet since the advent of global satellite records, and possibly the largest event since the eruption of Mount Tambora in 1815. It is … Continue reading → The post The 2023 climate event revealed the greatest failure of…
The 2023 climate event revealed the greatest failure of climate science
US Growth: From Hours Worked or Productivity Gains?
30 Dec 2025 Leave a comment
in applied price theory, econometerics, economic growth, economic history, labour economics, labour supply, macroeconomics
US economic growth can be divided into two parts: more hours worked, or more productivity per hour worked. In the past, the US labor force has been rising over time: the US labor force totaled 107 million people in 1980, 142 million in 2000, and was up to 171 million this year. However, after several…
US Growth: From Hours Worked or Productivity Gains?
Is house flipping a perfectly competitive industry?
30 Dec 2025 Leave a comment
in applied price theory, urban economics
One of the characteristics of perfect competition is free entry. If firms make an above average rate of return, new firms will enter. This increase in supply will lower price and the rate of return starts to fall. This might be happening in house flipping.See Why It’s a Tough Time for House-Flippers by Lori Ioannou of…
Is house flipping a perfectly competitive industry?
Claim: Anthropogenic Global Warming Could Lead to a New Ice Age
30 Dec 2025 1 Comment
in economics of climate change, economics of education, economics of natural disasters, environmental economics, environmentalism, global warming Tags: ice ages
Never mind that Earth has endured far more warming than today’s world without revisiting the extremes of the ancient past.
Claim: Anthropogenic Global Warming Could Lead to a New Ice Age
Canada fact of the day
29 Dec 2025 Leave a comment
in applied price theory, development economics, labour economics, labour supply, poverty and inequality, welfare reform Tags: Canada
Since 2015, Canada has tripled its Indigenous spending – paying more than on national defense. Over those same years, Indigenous people have suffered a catastrophic collapse in health and well-being: on average almost a full decade of lost life expectancy. That is from David Frum. The post Canada fact of the day appeared first on…
Canada fact of the day
Auckland Uni gets it right
29 Dec 2025 Leave a comment
in economics of bureaucracy, economics of education, liberalism, Marxist economics, politics - New Zealand, Public Choice Tags: free speech, political correctness, regressive left
The Auckland University Freedom of Expression Statement looks very good. It is clear with few weasel words. Key extracts: The University actively fosters and supports lawful and constructive debate by its staff and students on any topic, including with the participation of external speakers invited by a staff member, or a recognised student association or student…
Auckland Uni gets it right
New York Unheated EV School Bus Horror
29 Dec 2025 Leave a comment
in economics of climate change, economics of education, energy economics, environmental economics, environmentalism, global warming, politics - USA, transport economics, urban economics Tags: electric cars
Children’s fingers, toes and noses are so overrated…
New York Unheated EV School Bus Horror
Kids nowadays have it so difficult-Putting things in perspective.
28 Dec 2025 Leave a comment
in defence economics, development economics, economic history, growth disasters, war and peace
I think 2021 will be remembered where people lost the sense of perspective. So many people are saying how kids nowadays have it more difficult then ever before. The picture above A starving child in Sudan, 1993. Terezka, a girl who grew up in a concentration camp, draws a picture of her Poland “home”, December […]
Kids nowadays have it so difficult-Putting things in perspective.
The forgotten Genocide-Belgian Congo.
28 Dec 2025 Leave a comment
in economic history, economics of crime, law and economics Tags: age of empires, Congo, economics of colonialism
The Congo Free State was a corporate state in Central Africa privately owned by King Leopold II of Belgium founded and recognized by the Berlin Conference of 1885. In the 23 years (1885-1908) Leopold II ruled the Congo he massacred 10 million Africans by cutting off their hands and genitals, flogging them to death, starving […]
The forgotten Genocide-Belgian Congo.
Parents Win Major Victory in California Public Schools in Gender Change Case
28 Dec 2025 Leave a comment
in economics of love and marriage, law and economics, politics - USA
We have been discussing the efforts of school officials around the country to block information for parents on their children…
Parents Win Major Victory in California Public Schools in Gender Change Case
Book review: Economics of the New Zealand Maori
27 Dec 2025 Leave a comment
in development economics, economic history, labour economics, law and economics, politics - New Zealand, property rights Tags: economic anthropology, Maori economic development
In amongst my collection of books, I have assembled a number of classics, including some reasonably rare editions. One of those is Economics of the New Zealand Maori [*] by Raymond Firth. This book was originally published from Firth’s PhD thesis in 1929 (the thesis was approved in 1927 at the University of London). The edition…
Book review: Economics of the New Zealand Maori
Celebrating Two Years of Libertarian Success in Argentina
27 Dec 2025 Leave a comment
in applied price theory, Austrian economics, budget deficits, comparative institutional analysis, constitutional political economy, development economics, economic growth, economics of bureaucracy, economics of regulation, fiscal policy, growth disasters, history of economic thought, income redistribution, industrial organisation, labour economics, liberalism, libertarianism, macroeconomics, Public Choice, rentseeking, unemployment Tags: Argentina
As explained in my four-part series (here, here, here, and here) and in this clip from a recent interview, Javier Milei’s first two years have been amazingly successful. There are two points in the interview that deserve emphasis. First, Javier Milei’s libertarian policies already have been extremely beneficial for the Argentine economy. Inflation has dramatically […]
Celebrating Two Years of Libertarian Success in Argentina
Quotation of the Day…
27 Dec 2025 Leave a comment
in Adam Smith, Bill Easterly, development economics, economic history, history of economic thought, Milton Friedman
Tweet… is from page 298 of William Easterly’s brilliant 2025 book, Violent Saviors: The West’s Conquest of the Rest [footnote deleted; link added]: The Friedman’s [Milton and Rose] liked markets because they could make individual self-determination possible for all groups. Markets allowed “the freedom of individuals to pursue their own objective.” Markets made this possible…
Quotation of the Day…
Utopia, you are standing in it! 
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