2026-04-20 00:37:20
1. Religion and business economics Substack.
2. WDC crime is way down. Alex T. was right, POTMR.
3. Movie theaters are making an economic comeback?
5. Has the fight against inflation stalled in Argentina? (FT)
6. The case against off-shore processing.
7. Harry Law on alignment. And do AI-written plays have too little conflict?
8. Michelin restaurants in Kyoto.
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2026-04-19 17:13:17
In 2025, the U.S. raised average tariff duties from 2.4% to 9.6%, bringing protectionism to its highest level in eighty years. We explore the structure of these tariffs, estimate their short-run impacts, and summarize the growing literature on their effects. Across trade partners, the tariffs are correlated with trade deficits but not with geopolitical or strategic industrial goals, other than targeting China. In our baseline estimate, 90% of the tariffs are passed through to tariff-inclusive prices paid by U.S. importers. Incorporating the estimated price and trade responses into a static trade framework, we find an overall welfare impact ranging from a loss of 0.13% of GDP to a gain of 0.10%. These small net welfare impacts reflect sizable consumption losses roughly offset by income and revenue gains, with their sign hinging on whether U.S. terms-of-trade adjusted (on which the data are inconclusive). Among their stated rationales, the tariffs have been effective at raising federal revenue and diverting trade from China. However, it remains uncertain whether they will reduce the trade deficit, lower prices set by foreign exporters, promote manufacturing jobs, increase “friend-shoring” among aligned countries, or reshore key sectors; evidence from 2018-19 and 2025 indicators suggests a narrow path towards achieving these goals.
That is from
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2026-04-19 12:29:29
The subtitle of the paper is Puzzles, Patterns, and Possible Causes. Here is the abstract:
China’s large current account surplus has been an irritant to its trading partners. While industrial and trade policies often lead to sector-level imbalances, they play a relatively limited role in the economy-wide surplus. Structural factors such as an unbalanced sex ratio and uneven access to financing by state-owned and non-state firms are more important determinants of the current account imbalance. While macroeconomic stimulus can boost imports and reduce the surplus in the short run, any long-term solution would need to involve reforms aiming at addressing the structural problems.
By . I think not everyone will be persuaded, but the paper has numerous points of interest, including on the quality of the data. On the gender imbalance, the authors write this:
As the marriage market becomes increasingly competitive for young men, parents with a son raise their savings to improve their son’s relative standing in the relative market. At the same time, parents with a daughters face conflicting incentives on savings. On the one hand, they can reduce their savings to take advantage of the increased probability of marriage of their daughters. On the other hand, they may wish to raise their savings to preserve their daughters’ bargaining power within marriage…In the data, Wei and Zhang find strong evidence that a combination of having a son at home and living in a region with a skewed sex ratio greatly pushes up the household savings rate.
And on state-owned firms:
Since the banking system favors state-owned firms, many non-state-owned but highproductivity firms have difficulty with access to finance and therefore save for their own investment. This leads to a higher level of corporate savings.
Those points make sense to me, but perhaps industrial policy matters too because so many Chinese laborers have been underemployed, due to their (earlier) rural locations, thus limiting the applicability of Lerner Symmetry?
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2026-04-19 03:00:35
The 1941 Anglo-Soviet invasion destroyed Reza Shah — but not the Pahlavi state. The two Allies — joined by the United States in December 1941 — realized that the Iranian state could be useful in achieving the two goals for which they had invaded the country: physical control over oil — the British nightmare in World War II, even more so than in World War I, was loss of these vital supplies: and a land “corridor” to the Soviet Union…To facilitate the flow of both oil to Britain and supplies to the Soviet Union, the Allies found it expedient to remove Reza Shah but to preserve his state…the Allies kept his state but engineered his removal in part to curry much-needed favor among Iranians. “The Persians,” he wrote, “expect that we should at least save them from the Shah’s tyranny as compensation for invading their country.”
That is from Ervand Abrahamian’s A History of Modern Iran.
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2026-04-19 00:44:44
1. Cato Handbook on affordability.
2. Are first-generation college students overrated?
3. No Detectable Economic Effect of Extreme Heat After Correcting for Dependence. Here is analysis from Claude 4.7, link now fixed.
5. AI and the early history of electricity. Good claims.
6. Betting on how well various pundits predict the future.
7. On Jensen.
8. Ross Douthat (NYT) on lessons from Hungary.
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2026-04-18 23:43:44
What is the best and most sophisticated defense of architectural modernism, both from an aesthetic and a social point of view?
I thank you all in advance for your wisdom.
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