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Paul Krugman@pkrugman.bsky.social |
With an elasticity of 1, the estimate looks like this: t*14/(1+t) = 8 Work this through, and the tariff rate is 8/6 = 1.33, that is, 133 percent. With a higher elasticity, it would go higher, maybe to infinity 5/
1 replies 3 reposts 31 likes
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Paul Krugman
@pkrugman.bsky.social
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So how is it that in the 19th century the federal government largely paid its way with tariffs? Because back then the government was much, much smaller. Believing that we can go back to those days is just ignorant 6/
3 replies 4 reposts 96 likes