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70 sats \ 5 replies \ @Undisciplined 4 Apr \ on: Mini Pleb Economist: Quick analysis of tariffs econ
6th bullet on 1: Foreign producers hurt, foreign consumers benefit from lower prices.
I recall one of my trade professors saying that the expected welfare loss from going all the way to autarky is only about 3%. People can probably chill out. The sky isn't falling.
the expected welfare loss from going all the way to autarky is only about 3%
Eh, that's almost certainly wrong...... right? right?
There are certain things we just don't have the natural or human capital to make on our own
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Are those things worth 3% of economic activity?
I'm also sure it's wrong, btw, but the basic point that America can get along perfectly well without unfettered free trade is probably correct. Most likely we wouldn't even be reduced to a European or Canadian standard of living and we aren't going anywhere near full autarky.
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Yeah I agree that the panic isn't justified. Though I do think even if what you say is true, there will be a painful adjustment period.
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Yep. That's a prediction from general equilibrium models, which know nothing about the path to equilibrium.
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