If we end up w/ 15% global effective #tariffs rate, how much does #inflation rise over next year?
Direct effect:
15%(imports share of consumer purchases) X 12% tariff increase X 70% pass thru rate = 1.26%
Indirect effect:
10%(domestic goods import parts %) X 12% X 70% = .84%
2.1%overall #economy
If we end up w/ 15% global effective #tariffs rate, how much will GDP fall this year and over the next 4yrs after?
12% #tariffs increase/ 3.6% st deviation= 3.33
3.33 X -0.4% (decline in GDP this yr & each yr for 4 more) = -1.33% GDP this yr
#economy #tradewar #ChinaTradeEmbargo
https://bsky.app/profile/t0ussaint.bsky.social/post/3llkk426bv227
"...The impact is persistent and increases with the magnitude of the tariff change. Our baseline econometric model suggests that a one standard deviation increase in the tariff rate (corresponding to a 3.6% points) leads to about a 0.4% decline of output 5yrs later." #MAGAnomics [contains quote post or other embedded content]
If we end up w/ 15% global effective #tariffs rate, how much will unemployment rise?
historically, during the 2009 Great Recession, GDP fell 4% and we lost more than 8.7M jerbs.
8.7÷4×1.33=2.89
Okuns Law says for 1%GDP drop, you get a .5% rise in unemployment.
167M workers X .665% increase in unemployment = 1.1M
So we could lose 1.1-2.9M jobs
Conclusion: the markets are celebrating the US dropping 1.33%GDP, increasing #inflation 2.1% & losing 1-3M jobs, cool
toussaint