A Wonkish Note on Tariffs and Inflation
3 days ago
- #inflation
- #economics
- #tariffs
- The author experiments with posting wonky, economistic content on Substack without emailing it to avoid cluttering subscribers' inboxes.
- The post discusses the impact of tariffs on inflation, noting that effective tariff rates have risen less than headline rates due to carve-outs and exemptions.
- Customs duties as a percentage of GDP rose from 0.3% pre-Trump to 1.1%, suggesting an inflationary impact of around 0.8 percentage points.
- The HBS Pricing Lab estimates that the CPI is 0.8 percentage points higher due to tariffs, aligning with pre-Trump inflation forecasts.
- The author concludes there is no big puzzle about the limited effect of tariffs on inflation, as the impact aligns with expectations.
- Some readers suggest emailing all posts, including wonky ones, to ensure visibility.