How we connect economically with the world is critical. Brian Easton writes – The British Labour Government is struggling. Partly it is because they were badly prepared in opposition: the Conservative Government was making such a charlie of itself that Labour expected that it would do better and gave little thought as to how it […]
Lessons from Brexit
Lessons from Brexit
19 Dec 2025 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, constitutional political economy, economic growth, international economic law, international economics, macroeconomics Tags: British politics, economics of customs unions, free trade, tariffs
Humanity Has a Huge Surplus of Economic Misunderstanding
13 Dec 2025 Leave a comment
in applied price theory, history of economic thought, industrial organisation, international economics, politics - USA, Public Choice, rentseeking Tags: free trade, tarrifs
TweetHere’s a letter to AP Fact Check. Editor: Melissa Goldin does a deep dive into the cause(s) of the U.S. “agricultural trade deficit” (“FACT FOCUS: Trump blames Biden for the agricultural trade deficit. It’s not that simple,” December 10). To what extent is this “deficit” caused by the policies of Biden? To what extent is…
Humanity Has a Huge Surplus of Economic Misunderstanding
Quotation of the Day…
19 Nov 2025 Leave a comment
in applied price theory, history of economic thought, income redistribution, industrial organisation, international economics, Milton Friedman, politics - USA, Public Choice, rentseeking Tags: free trade, tariffs
Tweet… is from page 158 of Milton Friedman’s 1953 paper “The Case for Flexible Exchange Rates,” as this paper is reprinted in Friedman’s 1953 collection, Essays in Positive Economics: In brief, it [free trade] is desirable in its own right as one of the basic freedoms we cherish; it promotes the efficient use of resources…
Quotation of the Day…
Economists on the Trump Tariffs Supreme Court Case
07 Nov 2025 Leave a comment
in applied price theory, applied welfare economics, economic history, economics of bureaucracy, income redistribution, international economic law, international economics, International law, politics - USA, Public Choice Tags: free trade, tarrifs
It seems as if a few times every week, I see a headline about President Trump announcing a new tariff or repealing a tariff, sometimes involve many countries and sometime just a few. However, it is not at all clear that any president has a right to alter tariffs. This question was raised before Trump…
Economists on the Trump Tariffs Supreme Court Case
H1-B visa fees and the academic job market
28 Sep 2025 1 Comment
in applied price theory, economics of education, international economic law, international economics, politics - USA, Public Choice, rentseeking Tags: free trade, tariffs
Assume the courts do not strike this down (perhaps they will?). Will foreigners still be hired at the entry level with an extra 100k surcharge? I would think not,as university budgets are tight these days. I presume there is some way to turn them down legally, without courting discrimination lawsuits? What if you ask them […]
H1-B visa fees and the academic job market
Vernon Smith on Donald Trump’s Protectionism
11 Sep 2025 Leave a comment
in applied price theory, development economics, economic history, economics of bureaucracy, history of economic thought, income redistribution, international economics, politics - USA, Public Choice, rentseeking Tags: free trade, tariffs
TweetMy emeritus Nobel-laureate colleague, Vernon Smith, sent the following email to me in response to this post. I share Vernon’s note with his kind permission. Don, Trump, like all businesspersons turned political, wants government favors, that is Mercantilism which is as bad today as when Adam Smith railed against such cozy relationships. Same for labor…
Vernon Smith on Donald Trump’s Protectionism
Exports
31 Aug 2025 Leave a comment
in development economics, economic history, growth miracles, international economics Tags: free trade
More On Alleged Chinese Dumping
24 Aug 2025 Leave a comment
in applied price theory, development economics, economic history, entrepreneurship, growth miracles, history of economic thought, industrial organisation, international economics, politics - USA, Public Choice, rentseeking Tags: free trade, tariffs
TweetHere’s a second note to a commenter at my Facebook page. Mr. Schlomach: Commenting on my Facebook page, you allege that China ‘dumps’ goods in the U.S. and, in doing so, “has used our love of cheap stuff to suck our country of strategically critical technology/industry.” By suggesting that your fellow Americans buy stuff simply…
More On Alleged Chinese Dumping
Tariff Shenanigans
15 Jul 2025 Leave a comment
in applied price theory, international economic law, international economics, politics - USA Tags: free trade, offsetting behavior, tarrifs
In our textbook, Tyler and I give an amusing example of how entrepreneurs circumvented U.S. tariffs and quotas on sugar. Sugar could be cheaply imported into Canada and iced tea faced low tariffs when imported from Canada into the U.S., so firms created a high-sugar iced “tea” that was then imported into the US and […]
Tariff Shenanigans
Some Links
13 May 2025 Leave a comment
in applied price theory, econometerics, industrial organisation, international economics, survivor principle Tags: free trade, tariffs
TweetNicholas Bloom, Kyle Handley, André Kurmann, and Philip A. Luck revisit the “China Shock.” Two slices: Our research investigates the extent to which the opposing trends in manufacturing and services job growth are related. Our findings reveal that local labor markets more exposed to Chinese import competition experienced larger manufacturing job losses. But these losses…
Some Links
Tabarrok on the Movie Tariff
07 May 2025 1 Comment
in applied price theory, international economics, movies, politics - USA, Public Choice, rentseeking Tags: 2024 presidential election, free trade, tariffs
The Hollywood Reporter has a good piece on Trump’s proposed movie tariffs: Even if such a tariff were legal — and there is some debate about whether Trump has the authority to impose such levies — industry experts are baffled as to how, in practice, a “movie tariff” would work. “What exactly does he want […]
Tabarrok on the Movie Tariff
The best tariff threat is one you do not have to use
06 May 2025 1 Comment
in applied price theory, international economics, politics - USA Tags: 2024 presidential election, free trade, game theory, tariffs
Following up on an earlier post, Reciprocal tariffs as a tit-for-tat strategy in a repeated prisoners’ dilemma From NY Times:Trump imposed, quickly withdrew and then threatened to bring back huge tariffs on dozens of countries. Immediately, they began calling and asking what they could do to stop him. “More than 100 countries have already come to…
The best tariff threat is one you do not have to use
Twisted Illogic
02 May 2025 Leave a comment
in applied price theory, history of economic thought, industrial organisation, international economics, politics - USA, Public Choice, rentseeking Tags: 2024 presidential election, free trade, tarrifs
TweetHere’s a letter to The Hill. Editor: Pres. Trump said that “China probably will eat those tariffs” (“Trump says China ‘probably will eat those tariffs’,” April 29). So the president believes that the tariffs will be ‘eaten’ by China – meaning, he believes the tariffs won’t result in higher prices in America of Chinese goods.…
Twisted Illogic
Can Trump’s Tariff Offensive Deliver New American Jobs?
28 Apr 2025 Leave a comment
in applied price theory, entrepreneurship, industrial organisation, international economics, politics - USA Tags: 2024 presidential election, free trade, tariffs
By Lauren Weber of The WSJ. Excerpts:”Most economists and other experts are skeptical that job creation will happen on a large scale because planning and building new factories is an incredibly complex and lengthy process. Businesses will be reluctant to do that unless they’re sure the investment is worth it over the long term. A fairly…
Can Trump’s Tariff Offensive Deliver New American Jobs?
Long-Run Effects of Trade Wars
24 Apr 2025 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, development economics, econometerics, history of economic thought, industrial organisation, labour economics, labour supply, politics - USA, unemployment Tags: 2024 presidential election, free trade, tariffs, unintended consequences
This short note shows that accounting for capital adjustment is critical when analyzing the long-run effects of trade wars on real wages and consumption. The reason is that trade wars increase the relative price between investment goods and labor by taxing imported investment goods and their inputs. This price shift depresses capital demand, shrinks the […]
Long-Run Effects of Trade Wars
Utopia, you are standing in it! 
Recent Comments