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@Undisciplined
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Interesting. I appreciate the point that cycles like this can only exist (on a predictable schedule) if people don’t generally believe in them.
Does that include estimates for non-tariff barriers, though?
I know the tweeted rates are ludicrously high, but most countries do impose significant trade barriers.
Most of the large foreign holders have been reducing their US Bond holdings, which is what “dumping” refers to.
The market does set reserve currency, but it’s a very sticky quality that can’t change very quickly.
As long as we have it, there pretty much has to be a trade deficit.
Totally, normies loaded up on ETFs to get “exposure”.
Even just normal portfolio rebalancing would have them selling a bunch, to buy more stocks on the way down.
It's more about reserve currency status than devaluation. Other countries' domestic populations absorb more of the impact of their devaluations than Americans do because so much of our currency is held by foreigners.
Stated differently: the rest of the world demands dollars, which essentially makes dollars an uncounted export of the US. Foreigners buy dollars with their exports. There's no symmetric US demand for foreign currencies to balance that out.
I think this is just theater for their constituents who don't understand how irrelevant Europe has become.
Being scammed is just another word for fraud, which is a type of theft. The scammer essentially entered into a contract in bad faith, which nullifies the validity of the contract in the first place.
Modern micro is also founded on Marginal and Subjective Utility. The assumptions made about preferences are "Rationality Assumptions" that are only slightly stronger than what the Austrians also assume.
Wow.
I can see doing something like that to get an idea of what the total trade barrier might be.
That’s because the best trade models we have suggest trade should tend to be balanced, in the absence of barriers.
The big problem with that assumption is that America exports its inflation to the rest of the world, which creates a trade deficit.
51 sats \ 0 replies \ @Undisciplined 18h \ parent \ on: USA Reciprocal Tariffs Chart charts_and_numbers
How could I?
20 sats \ 2 replies \ @Undisciplined 18h \ parent \ on: What Economists Do and Why They Do It science
No, there are very weak assumptions made about the properties of preferences and then they just do the work in abstract to arrive at the functional form of the solution.
From there you can evaluate how different parameter values change the solution.
30 sats \ 4 replies \ @Undisciplined 18h \ parent \ on: What Economists Do and Why They Do It science
The solutions are a useful starting point, though, or the can be. Many of the assumptions about preferences are reasonable-ish, so you can at least have a baseline solution. Then you can think about how changes to the initial assumptions might shift the solution.
30 sats \ 6 replies \ @Undisciplined 19h \ parent \ on: What Economists Do and Why They Do It science
There's a bit of a throwing out the baby with the bathwater thing going on.
There is a lot of emphasis on solving the solvable mathematical models, which isn't particularly important. It's worth going over, because there are definitely things to be learned from those solutions. They have real implications.
Rather than stop there, though, is would be more valuable to then explore what happens when the assumptions that led to those solutions are relaxed. This is also done in PhD programs, but it's less emphasized.
I hadn’t thought about this relationship before, but it makes some intuitive sense.
Cantillon Effects incentivize trying to get access to money nearer where it entered the system. That’s not going to be at the point of sale for a normal business, since customers are the kind of normal people who get the money last.
So, you need bureaucrats and managers to secure access to money from the financial system or government programs, before it’s been devalued.
I definitely want to push back on this idea. Resource allocation is a central part of economics and it only has mathematical solutions when you pretend to know things that are not only impossible to know, but also likely diverge from reality.
i.e. preferences are unknowable and don’t necessarily conform to the assumptions that make micro models solvable.