Jack’s Links

Trump said: “I just left Los Angeles, thousands of cars, millions of cars coming in [from Japan]. We get nothing. We get cars. They get . . . We want to send rice, we want to send corn. . . . The imbalance of these things. They send a car. We send corn.”

So which is it? Do we send corn or don’t we send corn? And are cars “nothing”? And, if we do send corn, what’s wrong with that? Objecting to producing corn in the United States, where it’s cheaper to produce than in Japan, in return for cars that are cheaper to produce there than here—if they weren’t cheaper, we wouldn’t buy them—is to object to trade per se.

exhibit2

But in the realm of macroeconomic stabilization, I view “nothing” as something that–to a reasonable approximation–has been tried and has failed. Anything one does has consequences. There is no true “inaction.” There is only “Do A” or “Do B.”

Since 1900, has the American economy had massive inflation or massive deflation?  If you are spending fifty cents, it is massive inflation, as today that sum hardly buys you anything, but earlier you could have received a nice white shirt.  If you are spending 100k a year, there has been radical deflation.

most estimates cluster around zero and developmental effects on things like IQ can be rejected (“In all eight subsamples, we can rule out wealth effects on GPA smaller than 0.01 standard deviations”).

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