Lerner Symmetry Theorem: Import Tariffs Tax Exports
The Lerner symmetry theorem shows an import tariff and an export tax of equal rate have identical real effects, so...
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Trade and Wages for Skilled and Unskilled: Textbook Defied
How trade and wages for skilled and unskilled workers diverged from textbook predictions, why the skill premium rose, and what...
Effective Rate of Protection: Why Low Tariffs Shelter More
The effective rate of protection measures how much a tariff structure shelters an industry's value added, explaining why a low...
The Lucas Critique Applied to Inflation Models
The Lucas critique explains why every major Phillips Curve breakdown since 1970 was predictable. Reduced-form inflation models inherit the policy...
Cost-Push vs Demand-Pull: A Modern Reassessment
The cost-push vs demand-pull framework still organizes inflation discussions, but modern episodes mix both forces. Expectations and markups complicate the...
Inflation Persistence: Why Past Inflation Drives Future Inflation
Inflation persistence measures how strongly past inflation drives future inflation. It collapsed after the Volcker disinflation and rebounded modestly during...
Sacrifice Ratio: Output Cost of Disinflation
The sacrifice ratio measures the output lost per percentage point of inflation reduction. The 1980s episodes produced ratios near 1.5;...
Wage-Price Spirals: Theory, Evidence, 1970s vs 2022
Wage-price spirals require wage indexation, weak monetary anchors, and unanchored expectations. The 1970s satisfied all three; 2022 did not. The...
The Taylor Rule Reaction Function: Estimation and Limitations
The Taylor rule reaction function estimates how central banks respond to inflation and slack, but data timing, identification, and regime...
FX Intervention Sterilization: How Central Banks Move Currencies
FX intervention sterilization lets a central bank move its currency through balance-sheet operations without changing domestic interest rates, with effectiveness...