Marginal Revolution https://marginalrevolution.com/ Small Steps Toward A Much Better World Tue, 21 Apr 2026 20:25:00 +0000 en-US hourly 1 https://marginalrevolution.com/wp-content/uploads/2015/10/cropped-MR-logo-thumbnail-32x32.png Marginal REVOLUTION https://marginalrevolution.com/ 32 32 42693868 https://marginalrevolution.com/marginalrevolution/2026/04/images-2-0.html?utm_source=rss&utm_medium=rss&utm_campaign=images-2-0 Imagegen 2.0 https://feeds.feedblitz.com/~/954181088/0/marginalrevolution~Imagegen.html https://marginalrevolution.com/marginalrevolution/2026/04/images-2-0.html#comments Tue, 21 Apr 2026 19:47:44 +0000 https://marginalrevolution.com/?p=92882 Created by Alex T., and of course GPT as well.

The post Imagegen 2.0 appeared first on Marginal REVOLUTION.

]]> Image

Created by Alex T., and of course GPT as well.

The post Imagegen 2.0 appeared first on Marginal REVOLUTION.

]]> https://marginalrevolution.com/marginalrevolution/2026/04/images-2-0.html/feed 1 92882 https://marginalrevolution.com/marginalrevolution/2026/04/tuesday-assorted-links-565.html?utm_source=rss&utm_medium=rss&utm_campaign=tuesday-assorted-links-565 Tuesday assorted links https://feeds.feedblitz.com/~/954173444/0/marginalrevolution~Tuesday-assorted-links.html https://marginalrevolution.com/marginalrevolution/2026/04/tuesday-assorted-links-565.html#comments Tue, 21 Apr 2026 17:34:33 +0000 https://marginalrevolution.com/?p=92872 1. Desmond Morris, RIP (NYT). 2. A long NYT feature on how to be cultured. 3. “We apply our theory to US state legislative elections, and find that ideologically extreme candidates receive significantly lower voter support in initiative than in non-initiative states.” 4. Guinea worm eradicated. 5. People laid off from USAID (NYT). 6. Ariel […]

The post Tuesday assorted links appeared first on Marginal REVOLUTION.

]]> 1. Desmond Morris, RIP (NYT).

2. A long NYT feature on how to be cultured.

3. “We apply our theory to US state legislative elections, and find that ideologically extreme candidates receive significantly lower voter support in initiative than in non-initiative states.”

4. Guinea worm eradicated.

5. People laid off from USAID (NYT).

6. Ariel Rubinstein tells his story.  And his home page more generally.

7. Deirdre on Doug North and neo-institutionalism.

The post Tuesday assorted links appeared first on Marginal REVOLUTION.

]]> https://marginalrevolution.com/marginalrevolution/2026/04/tuesday-assorted-links-565.html/feed 43 92872 https://marginalrevolution.com/marginalrevolution/2026/04/the-average-is-over-generation.html?utm_source=rss&utm_medium=rss&utm_campaign=the-average-is-over-generation The Average is Over generation? https://feeds.feedblitz.com/~/954169274/0/marginalrevolution~The-Average-is-Over-generation.html https://marginalrevolution.com/marginalrevolution/2026/04/the-average-is-over-generation.html#comments Tue, 21 Apr 2026 16:29:11 +0000 https://marginalrevolution.com/?p=92868 The result is that even though today’s young adults, and graduates in particular, are over-represented in the top quartile of the earnings distribution, they are also far more likely to be at the bottom than the top for earnings relative to reasonable expectations. In both the UK and US, even though only 10 percent of […]

The post The Average is Over generation? appeared first on Marginal REVOLUTION.

]]>

The result is that even though today’s young adults, and graduates in particular, are over-represented in the top quartile of the earnings distribution, they are also far more likely to be at the bottom than the top for earnings relative to reasonable expectations. In both the UK and US, even though only 10 percent of graduates are in the lowest earnings quartile, one in three is in the bottom bracket for earnings relative to expectations.

Here is more from John Burn-Murdoch at the FT.

The post The Average is Over generation? appeared first on Marginal REVOLUTION.

]]> https://marginalrevolution.com/marginalrevolution/2026/04/the-average-is-over-generation.html/feed 11 92868 https://marginalrevolution.com/marginalrevolution/2026/04/the-luddites-were-the-first-to-attack-ai.html?utm_source=rss&utm_medium=rss&utm_campaign=the-luddites-were-the-first-to-attack-ai The Luddites Were the First to Attack AI https://feeds.feedblitz.com/~/954150101/0/marginalrevolution~The-Luddites-Were-the-First-to-Attack-AI.html https://marginalrevolution.com/marginalrevolution/2026/04/the-luddites-were-the-first-to-attack-ai.html#comments Tue, 21 Apr 2026 11:18:30 +0000 https://marginalrevolution.com/?p=92864 Everyone knows the Luddites smashed looms. What is less appreciated is that the loom was the first serious programmable device — the direct ancestor of the computer. Thus, the Luddites weren’t just the first to resist automation. They were in some ways the first to attack AI. The Jacquard loom, introduced in France circa 1805, […]

The post The Luddites Were the First to Attack AI appeared first on Marginal REVOLUTION.

]]> Everyone knows the Luddites smashed looms. What is less appreciated is that the loom was the first serious programmable device — the direct ancestor of the computer. Thus, the Luddites weren’t just the first to resist automation. They were in some ways the first to attack AI.

https://encyclopedia.design/2023/06/18/weaving-wonders-the-jacquard-looms-textile-revolution/

The Jacquard loom, introduced in France circa 1805, used a chain of punched cards to control which threads were raised for each pass of the shuttle. The ability to change the pattern of the loom’s weave by simply changing cards was an important conceptual precursor to computer programming. Babbage borrowed the idea directly for the Analytical Engine in the 1830s.

The Luddites lost–they were violently suppressed by the UK military–but more generally they lost because programmable looms brought patterned clothes to the masses.

Prior to its invention, the creation of complex patterns required skilled and labour-intensive manual labour, often involving large teams of weavers. With the Jacquard loom, a single operator could control the machine and produce intricate designs with relative ease.

This innovation greatly increased the speed and efficiency of textile production. It also opened up new possibilities for creativity and design, as the loom enabled the production of intricate patterns that were previously unattainable. The Jacquard loom contributed to the democratization of textile manufacturing, making intricate fabrics accessible to a wider audience

By the time Jacquard died in 1834, thousands of his looms were operating in Manchester, an epi-center of the Luddites riots. Moreover, just over 100 years later, Manchester birthed the Manchester Baby and the Manchester Mark 1, the first electronic stored-program computer. And who was hired to program the latter? None other than Alan Turing.

Ada Lovelace had foretold it all beautifully: “the Analytical Engine weaves algebraical patterns just as the Jacquard-loom weaves flowers and leaves.”

Addendum: I thank Claude for assistance on this post.

The post The Luddites Were the First to Attack AI appeared first on Marginal REVOLUTION.

]]> https://marginalrevolution.com/marginalrevolution/2026/04/the-luddites-were-the-first-to-attack-ai.html/feed 50 92864 https://marginalrevolution.com/marginalrevolution/2026/04/a-comparison-of-agentic-ai-systems-and-human-economists.html?utm_source=rss&utm_medium=rss&utm_campaign=a-comparison-of-agentic-ai-systems-and-human-economists A Comparison of Agentic AI Systems and Human Economists https://feeds.feedblitz.com/~/954135287/0/marginalrevolution~A-Comparison-of-Agentic-AI-Systems-and-Human-Economists.html https://marginalrevolution.com/marginalrevolution/2026/04/a-comparison-of-agentic-ai-systems-and-human-economists.html#comments Tue, 21 Apr 2026 04:25:44 +0000 https://marginalrevolution.com/?p=92874 This paper compares agentic AI systems and human economists performing the same causal inference tasks. AI systems and humans generally obtain similar median causal effect estimates. While there is substantial dispersion of estimates across model instances, the human distributions of estimates have wider tails. Using AI models as reviewers to compare and rank “submissions,” the […]

The post A Comparison of Agentic AI Systems and Human Economists appeared first on Marginal REVOLUTION.

]]>

This paper compares agentic AI systems and human economists performing the same causal inference tasks. AI systems and humans generally obtain similar median causal effect estimates. While there is substantial dispersion of estimates across model instances, the human distributions of estimates have wider tails. Using AI models as reviewers to compare and rank “submissions,” the following ranking emerges regardless of reviewer model: (1) Codex GPT-5.4, (2) Codex GPT-5.3-Codex, (3) Claude Code Opus 4.6, and (4) Human Researchers. These findings suggest that agentic AI systems will allow us to scale empirical research in economics.

I enjoy the name of the author, namely Serafin Grundl.  Here is the paper, via Ethan Mollick.  You could interpret these results as showing the AIs have fewer hallucinations.  And just to reiterate a key point from the paper:

The second part of this paper is an AI review tournament in which “submissions” (codes and write-ups) from humans and the AI models are compared and ranked against each other. The reviewers are the following AI models: Gemini 3.1 Pro Preview, Opus 4.6 and GPT-5.4. For each review the reviewer is asked to write a report comparing four submissions (human, Opus 4.6, GPT-5.3-Codex, GPT-5.4). Each reviewer model writes comparison reports for the same 300 comparison groups. The average rankings are strikingly similar across reviewer models: (1) Codex GPT-5.4, (2) Codex GPT-5.3-Codex, (3) Claude Code Opus 4.6, and 2(4) Human Researchers.

Who comes in last?  Hi people!

The post A Comparison of Agentic AI Systems and Human Economists appeared first on Marginal REVOLUTION.

]]> https://marginalrevolution.com/marginalrevolution/2026/04/a-comparison-of-agentic-ai-systems-and-human-economists.html/feed 18 92874 https://marginalrevolution.com/marginalrevolution/2026/04/zimbabwe-facts-of-the-day.html?utm_source=rss&utm_medium=rss&utm_campaign=zimbabwe-facts-of-the-day Zimbabwe facts of the day https://feeds.feedblitz.com/~/954111893/0/marginalrevolution~Zimbabwe-facts-of-the-day.html https://marginalrevolution.com/marginalrevolution/2026/04/zimbabwe-facts-of-the-day.html#comments Mon, 20 Apr 2026 18:04:36 +0000 https://marginalrevolution.com/?p=92866 Zimbabwe, often considered an economic basket-case because of its history of farm seizures and hyperinflation, is enjoying an idiosyncratic boom. High prices for the metal and other commodities have led to a surge of cash through its highly informal economy. They have made it easier for authorities to stop printing money and meddling in currency […]

The post Zimbabwe facts of the day appeared first on Marginal REVOLUTION.

]]>

Zimbabwe, often considered an economic basket-case because of its history of farm seizures and hyperinflation, is enjoying an idiosyncratic boom. High prices for the metal and other commodities have led to a surge of cash through its highly informal economy. They have made it easier for authorities to stop printing money and meddling in currency markets; inflation is at its lowest in about 30 years. The IMF has repeatedly revised upwards estimates for economic growth, most recently to at least 7.5% for 2025, almost double the African average…

Gold is not the only source of growth. The current tobacco crop will be the largest on record. Lithium, chrome and platinum miners, many of them Chinese, have raised production. Zimbabwe’s diaspora, mainly in South Africa, sent back $2.5bn last year. So overall demand is higher than ever, says a banker.

Here is more from The Economist.  We are told that the private vault sector is booming too.

The post Zimbabwe facts of the day appeared first on Marginal REVOLUTION.

]]> https://marginalrevolution.com/marginalrevolution/2026/04/zimbabwe-facts-of-the-day.html/feed 18 92866 https://marginalrevolution.com/marginalrevolution/2026/04/monday-assorted-links-556.html?utm_source=rss&utm_medium=rss&utm_campaign=monday-assorted-links-556 Monday assorted links https://feeds.feedblitz.com/~/954107108/0/marginalrevolution~Monday-assorted-links.html https://marginalrevolution.com/marginalrevolution/2026/04/monday-assorted-links-556.html#comments Mon, 20 Apr 2026 16:05:08 +0000 https://marginalrevolution.com/?p=92858 1. Sindarov profile.  And: “I know this GM who made 2600 at 19 without reading a chess book in his life.”  And Magnus on Sindarov vs. Gukesh. 2. Inflation-adjusted book prices over time. 3. On the Amanat Iran book and its excellence. 4. More on the wet market hypothesis.  We should all be uncertain, but […]

The post Monday assorted links appeared first on Marginal REVOLUTION.

]]> 1. Sindarov profile.  And: “I know this GM who made 2600 at 19 without reading a chess book in his life.”  And Magnus on Sindarov vs. Gukesh.

2. Inflation-adjusted book prices over time.

3. On the Amanat Iran book and its excellence.

4. More on the wet market hypothesis.  We should all be uncertain, but it is mood affiliation (with conspiracy theorizing, for one thing) to be convinced of Lab Leak.  It is contributing to negative emotional contagion.

5. Review of the new Knausgaard series.  By Max Norman: “(I’d rather read Knausgaard on defecation than predestination, let alone whether machines can think or trees can feel.)”‘

6. AI and the arts, a short Instagram video.

7. AI and the pancreatic vaccine.  More testing is needed, but there is a reasonable chance that we have a good treatment for pancreatic cancer, and AI was instrumental in that.  It is mRNA as well, so a double burn on the haters.

The post Monday assorted links appeared first on Marginal REVOLUTION.

]]> https://marginalrevolution.com/marginalrevolution/2026/04/monday-assorted-links-556.html/feed 82 92858 https://marginalrevolution.com/marginalrevolution/2026/04/eight-rules-to-regain-public-trust-in-academia.html?utm_source=rss&utm_medium=rss&utm_campaign=eight-rules-to-regain-public-trust-in-academia Eight Rules to Regain Public Trust in Academia https://feeds.feedblitz.com/~/954092465/0/marginalrevolution~Eight-Rules-to-Regain-Public-Trust-in-Academia.html https://marginalrevolution.com/marginalrevolution/2026/04/eight-rules-to-regain-public-trust-in-academia.html#comments Mon, 20 Apr 2026 11:17:21 +0000 https://marginalrevolution.com/?p=92862 The Yale Report was quite good but for concision I prefer Kevin Bryan’s Eight Rules: 1. Produce and Teach Useful Knowledge Universities exist to generate and teach useful knowledge. This knowledge is grounded in skeptical inquiry, empirical evidence, and logical deduction. “Useful” includes not only practical applications but also fundamental discoveries that expand our understanding […]

The post Eight Rules to Regain Public Trust in Academia appeared first on Marginal REVOLUTION.

]]> The Yale Report was quite good but for concision I prefer Kevin Bryan’s Eight Rules:

1. Produce and Teach Useful Knowledge
Universities exist to generate and teach useful knowledge. This knowledge is grounded in skeptical inquiry, empirical evidence, and logical deduction. “Useful” includes not only practical applications but also fundamental discoveries that expand our understanding of the world, even if their benefits are long-term.
2. Be Useful to All of Society
Universities are subsidized only if society at large finds them valuable. Research may take time to bear fruit, but its insights should ultimately serve the public good, communicated openly and accessibly, and presented with epistemic humility. Teaching should be done with care and draw on up-to-date research.
3. Attract Talent from All of Society
Useful knowledge can be created by people from any social or economic background. Do not waste talent. Do not select talent based on who knows “how to play the game”. Avoid insular language or norms that deter people from entering research.
4. Neutral, Objective Research Produces Useful Knowledge
Research must be neutral and objective. It is true that everyone has their individual background and preferences; nonetheless, unbiased research is still possible. Tradition, folk knowledge, and storytelling all play an important roles in society, but they are not the purpose of universities. There is no “Western science” or culturally-determined “ways of knowing”. Rather, research is open to all and can be performed identically regardless of background.
5. Hire, Promote, and Cite Based on Knowledge Contribution
Hiring, promotion, and citation must be based on an individual’s contribution to knowledge. Nepotism, group preferences, and adherence to specific “schools of thought” corrupt this process. When advancement is not based on merit, the public rightly questions our integrity and the objectivity of our findings.
6. Keep Personal Views Out of Research and Teaching
A scholar’s personal politics should be invisible in their research and teaching. If a finding is predictable based on the author’s identity or known views, the process has failed. Objectivity is the hallmark of credible science. Academics may hold private beliefs like anyone else, but their academic work must stand apart from them.
7. Research Fraud is Unacceptable
Fraud destroys trust. Misrepresentation of results, selective reporting, or methods designed to publish rather than to discover are also harmful. Proven fraud must bring immediate dismissal, as it violates the core purpose of academia.
8. Scientific Institutions Should Be Apolitical
Universities, journals, and scientific societies must remain non-partisan. Their public statements must be rare, restricted to issues of direct expert consensus, and made only when silence would be a greater threat to their integrity than speaking. Activism sacrifices credibility for influence – or worse yet, sacrifices credibility and influence alike.

I would add 9) Grades must be objective and useful discriminators of talent.

The post Eight Rules to Regain Public Trust in Academia appeared first on Marginal REVOLUTION.

]]> https://marginalrevolution.com/marginalrevolution/2026/04/eight-rules-to-regain-public-trust-in-academia.html/feed 101 92862 https://marginalrevolution.com/marginalrevolution/2026/04/how-long-should-a-college-degree-take.html?utm_source=rss&utm_medium=rss&utm_campaign=how-long-should-a-college-degree-take How long should a college degree take? https://feeds.feedblitz.com/~/954082577/0/marginalrevolution~How-long-should-a-college-degree-take.html https://marginalrevolution.com/marginalrevolution/2026/04/how-long-should-a-college-degree-take.html#comments Mon, 20 Apr 2026 07:01:44 +0000 https://marginalrevolution.com/?p=92860 It takes most college students at least four years to earn a bachelor’s degree. Christie Williams finished in three months. The North Carolina human resources executive spent two months racking up credits through web tutorials after work in 2024, then raced through 11 online classes at the University of Maine at Presque Isle in four […]

The post How long should a college degree take? appeared first on Marginal REVOLUTION.

]]>

It takes most college students at least four years to earn a bachelor’s degree. Christie Williams finished in three months.

The North Carolina human resources executive spent two months racking up credits through web tutorials after work in 2024, then raced through 11 online classes at the University of Maine at Presque Isle in four weeks. Later that year, she went back to earn her master’s — in just five weeks. The two degrees cost a total of just over $4,000.

Since then, she has coached a thousand other students on how to speed through the state college, shaving off years and thousands of dollars from the usual cost of a degree.

Here is the full story, via Anecdotal.

The post How long should a college degree take? appeared first on Marginal REVOLUTION.

]]> https://marginalrevolution.com/marginalrevolution/2026/04/how-long-should-a-college-degree-take.html/feed 69 92860 https://marginalrevolution.com/marginalrevolution/2026/04/will-college-get-fixed.html?utm_source=rss&utm_medium=rss&utm_campaign=will-college-get-fixed Will college get fixed? https://feeds.feedblitz.com/~/954078011/0/marginalrevolution~Will-college-get-fixed.html https://marginalrevolution.com/marginalrevolution/2026/04/will-college-get-fixed.html#comments Mon, 20 Apr 2026 04:53:48 +0000 https://marginalrevolution.com/?p=92859 That is the topic of my latest Free Press column.  Here is one excerpt: So schools will respond to cost pressures by letting quality deteriorate. More instruction will be of the inferior online variety. There are very good online experiences, but schools are too bureaucratic and not run well enough to deliver them. Fewer professors […]

The post Will college get fixed? appeared first on Marginal REVOLUTION.

]]> That is the topic of my latest Free Press column.  Here is one excerpt:

So schools will respond to cost pressures by letting quality deteriorate. More instruction will be of the inferior online variety. There are very good online experiences, but schools are too bureaucratic and not run well enough to deliver them. Fewer professors will be full-salaried, tenure-track professors. Administrators and staff will grow at much slower rates than over the last 20 years, a positive development.

That overall picture may sound grim, but adjustments will kick in to limit the costs. A global market will ensure that adjunct faculty are smarter and better than before. Students will get better at using AI to teach themselves, filling in the gaps left by university budget shortages.

At the same time, colleges and universities will get better at marketing and fundraising. Schools with famous football and basketball teams will be just fine. Schools will intensively market a few academic superstars and let the quality of their median tenured faculty decline. Every possible profit center in a university will be mined for extra revenue, whether extra housekeeping service for dormitory living or renting out the swimming pool and university library to nearby retirees.

And this:

Perhaps you commonly hear it said that “college is what you make of it.” That may sound like a cliché, but it is a truth that helps us understand this new world to come. A lot of students just flat out want to go to college. If they have to put more into the social side of learning to make it worthwhile, they will do so.

In sum, there will be a lot of painful adjustment, but the major institutions will not come close to disappearing.

The post Will college get fixed? appeared first on Marginal REVOLUTION.

]]> https://marginalrevolution.com/marginalrevolution/2026/04/will-college-get-fixed.html/feed 23 92859 https://marginalrevolution.com/marginalrevolution/2026/04/that-was-then-this-is-now-57.html?utm_source=rss&utm_medium=rss&utm_campaign=that-was-then-this-is-now-57 That was then, this is now https://feeds.feedblitz.com/~/954061559/0/marginalrevolution~That-was-then-this-is-now.html https://marginalrevolution.com/marginalrevolution/2026/04/that-was-then-this-is-now-57.html#comments Sun, 19 Apr 2026 19:26:54 +0000 https://marginalrevolution.com/?p=92857 At the advent of a more aggressive Persian Gulf policy on the part of Iran during the interwar years, the resilience of these symbols was watched like a kind of barometer that attested to Britain’s levell of commitment to the maintenance of security in the Persian Gulf.  Britainäs abstention from the use of force against […]

The post That was then, this is now appeared first on Marginal REVOLUTION.

]]>

At the advent of a more aggressive Persian Gulf policy on the part of Iran during the interwar years, the resilience of these symbols was watched like a kind of barometer that attested to Britain’s levell of commitment to the maintenance of security in the Persian Gulf.  Britainäs abstention from the use of force against Iran, dictated by its will to protect its interests in Iran, was at times perceived as weakness by the shaykhs and merchants of the Arabian littoral.  During the period of heightened tension that accompanied Reza Shah’s rise, a perpetual cause of excitement among the Arabs inhabiting the southern littoral was the persistence of rumors that Iran would soon effect the complete withdrawal of the British from the area of the Persian Gulf waterway.

That is from the very useful The Origins of the Arab-Iranian Conflict: Nationalism and Sovereignty in the Gulf between the World Wars, by Chelsi Mueller.

By the way, on the eve of WWI, the population of Dubai was about 2,075 people, and about 500 of them were Iranian merchants.

The post That was then, this is now appeared first on Marginal REVOLUTION.

]]> https://marginalrevolution.com/marginalrevolution/2026/04/that-was-then-this-is-now-57.html/feed 10 92857 https://marginalrevolution.com/marginalrevolution/2026/04/sunday-assorted-links-563.html?utm_source=rss&utm_medium=rss&utm_campaign=sunday-assorted-links-563 Sunday assorted links https://feeds.feedblitz.com/~/954056669/0/marginalrevolution~Sunday-assorted-links.html https://marginalrevolution.com/marginalrevolution/2026/04/sunday-assorted-links-563.html#comments Sun, 19 Apr 2026 16:37:20 +0000 https://marginalrevolution.com/?p=92853 1. Religion and business economics Substack. 2. WDC crime is way down.  Alex T. was right, POTMR. 3. Movie theaters are making an economic comeback? 4. Bar-tailed godwit. 5. Has the fight against inflation stalled in Argentina? (FT) 6. The case against off-shore processing. 7. Harry Law on alignment.  And do AI-written plays have too […]

The post Sunday assorted links appeared first on Marginal REVOLUTION.

]]> 1. Religion and business economics Substack.

2. WDC crime is way down.  Alex T. was right, POTMR.

3. Movie theaters are making an economic comeback?

4. Bar-tailed godwit.

5. Has the fight against inflation stalled in Argentina? (FT)

6. The case against off-shore processing.

7. Harry Law on alignment.  And do AI-written plays have too little conflict?

8. Michelin restaurants in Kyoto.

The post Sunday assorted links appeared first on Marginal REVOLUTION.

]]> https://marginalrevolution.com/marginalrevolution/2026/04/sunday-assorted-links-563.html/feed 61 92853 https://marginalrevolution.com/marginalrevolution/2026/04/on-the-impact-of-trumps-tariffs.html?utm_source=rss&utm_medium=rss&utm_campaign=on-the-impact-of-trumps-tariffs On the impact of Trump’s tariffs https://feeds.feedblitz.com/~/954039587/0/marginalrevolution~On-the-impact-of-Trumps-tariffs.html https://marginalrevolution.com/marginalrevolution/2026/04/on-the-impact-of-trumps-tariffs.html#comments Sun, 19 Apr 2026 09:13:17 +0000 https://marginalrevolution.com/?p=92830 In 2025, the U.S. raised average tariff duties from 2.4% to 9.6%, bringing protectionism to its highest level in eighty years. We explore the structure of these tariffs, estimate their short-run impacts, and summarize the growing literature on their effects. Across trade partners, the tariffs are correlated with trade deficits but not with geopolitical or […]

The post On the impact of Trump’s tariffs appeared first on Marginal REVOLUTION.

]]>

In 2025, the U.S. raised average tariff duties from 2.4% to 9.6%, bringing protectionism to its highest level in eighty years. We explore the structure of these tariffs, estimate their short-run impacts, and summarize the growing literature on their effects. Across trade partners, the tariffs are correlated with trade deficits but not with geopolitical or strategic industrial goals, other than targeting China. In our baseline estimate, 90% of the tariffs are passed through to tariff-inclusive prices paid by U.S. importers. Incorporating the estimated price and trade responses into a static trade framework, we find an overall welfare impact ranging from a loss of 0.13% of GDP to a gain of 0.10%. These small net welfare impacts reflect sizable consumption losses roughly offset by income and revenue gains, with their sign hinging on whether U.S. terms-of-trade adjusted (on which the data are inconclusive). Among their stated rationales, the tariffs have been effective at raising federal revenue and diverting trade from China. However, it remains uncertain whether they will reduce the trade deficit, lower prices set by foreign exporters, promote manufacturing jobs, increase “friend-shoring” among aligned countries, or reshore key sectors; evidence from 2018-19 and 2025 indicators suggests a narrow path towards achieving these goals.

That is from Pablo D. Fajgelbaum & Amit Khandelwal.  I’ve said this before and I will repeat: if you love government revenue, the tariffs really are not so bad.  The biggest cost of the tariffs is that the government has found a new revenue source, and the Democrats will institutionalize this.  Classical liberals and libertarians have a coherent case against the tariffs, many other people do not, much as you might hear otherwise.

The post On the impact of Trump’s tariffs appeared first on Marginal REVOLUTION.

]]> https://marginalrevolution.com/marginalrevolution/2026/04/on-the-impact-of-trumps-tariffs.html/feed 112 92830 https://marginalrevolution.com/marginalrevolution/2026/04/the-chinese-current-account-imbalances.html?utm_source=rss&utm_medium=rss&utm_campaign=the-chinese-current-account-imbalances The Chinese Current Account Imbalances https://feeds.feedblitz.com/~/954031196/0/marginalrevolution~The-Chinese-Current-Account-Imbalances.html https://marginalrevolution.com/marginalrevolution/2026/04/the-chinese-current-account-imbalances.html#comments Sun, 19 Apr 2026 04:29:29 +0000 https://marginalrevolution.com/?p=92829 The subtitle of the paper is Puzzles, Patterns, and Possible Causes.  Here is the abstract: China’s large current account surplus has been an irritant to its trading partners. While industrial and trade policies often lead to sector-level imbalances, they play a relatively limited role in the economy-wide surplus. Structural factors such as an unbalanced sex […]

The post The Chinese Current Account Imbalances appeared first on Marginal REVOLUTION.

]]> The subtitle of the paper is Puzzles, Patterns, and Possible Causes.  Here is the abstract:

China’s large current account surplus has been an irritant to its trading partners. While industrial and trade policies often lead to sector-level imbalances, they play a relatively limited role in the economy-wide surplus. Structural factors such as an unbalanced sex ratio and uneven access to financing by state-owned and non-state firms are more important determinants of the current account imbalance. While macroeconomic stimulus can boost imports and reduce the surplus in the short run, any long-term solution would need to involve reforms aiming at addressing the structural problems.

By Chang Ma & Shang-Jin Wei.  I think not everyone will be persuaded, but the paper has numerous points of interest, including on the quality of the data.  On the gender imbalance, the authors write this:

As the marriage market becomes increasingly competitive for young men, parents with a son raise their savings to improve their son’s relative standing in the relative market. At the same time, parents with a daughters face conflicting incentives on savings. On the one hand, they can reduce their savings to take advantage of the increased probability of marriage of their daughters. On the other hand, they may wish to raise their savings to preserve their daughters’ bargaining power within marriage…In the data, Wei and Zhang find strong evidence that a combination of having a son at home and living in a region with a skewed sex ratio greatly pushes up the household savings rate.

And on state-owned firms:

Since the banking system favors state-owned firms, many non-state-owned but highproductivity firms have difficulty with access to finance and therefore save for their own investment. This leads to a higher level of corporate savings.

Those points make sense to me, but perhaps industrial policy matters too because so many Chinese laborers have been underemployed, due to their (earlier) rural locations, thus limiting the applicability of Lerner Symmetry?

The post The Chinese Current Account Imbalances appeared first on Marginal REVOLUTION.

]]> https://marginalrevolution.com/marginalrevolution/2026/04/the-chinese-current-account-imbalances.html/feed 12 92829 https://marginalrevolution.com/marginalrevolution/2026/04/that-was-then-this-is-not-now.html?utm_source=rss&utm_medium=rss&utm_campaign=that-was-then-this-is-not-now That was then, this is not now? https://feeds.feedblitz.com/~/954014228/0/marginalrevolution~That-was-then-this-is-not-now.html https://marginalrevolution.com/marginalrevolution/2026/04/that-was-then-this-is-not-now.html#comments Sat, 18 Apr 2026 19:00:35 +0000 https://marginalrevolution.com/?p=92854 The 1941 Anglo-Soviet invasion destroyed Reza Shah — but not the Pahlavi state.  The two Allies — joined by the United States in December 1941 — realized that the Iranian state could be useful in achieving the two goals for which they had invaded the country: physical control over oil — the British nightmare in […]

The post That was then, this is not now? appeared first on Marginal REVOLUTION.

]]>

The 1941 Anglo-Soviet invasion destroyed Reza Shah — but not the Pahlavi state.  The two Allies — joined by the United States in December 1941 — realized that the Iranian state could be useful in achieving the two goals for which they had invaded the country: physical control over oil — the British nightmare in World War II, even more so than in World War I, was loss of these vital supplies: and a land “corridor” to the Soviet Union…To facilitate the flow of both oil to Britain and supplies to the Soviet Union, the Allies found it expedient to remove Reza Shah but to preserve his state…the Allies kept his state but engineered his removal in part to curry much-needed favor among Iranians.  “The Persians,” he wrote, “expect that we should at least save them from the Shah’s tyranny as compensation for invading their country.”

That is from Ervand Abrahamian’s A History of Modern Iran.

The post That was then, this is not now? appeared first on Marginal REVOLUTION.

]]> https://marginalrevolution.com/marginalrevolution/2026/04/that-was-then-this-is-not-now.html/feed 14 92854