Executive Summary: Introduction On October 9th, China imposed export controls on rare earth minerals and related technologies. Since then, rare earth minerals have been dominating news headlines, with many experts espousing the importance of reducing the U.S.’s dependence on China for these minerals. The Trump administration’s policies have heavily focused on rare earth minerals too; … Continue reading
Tag Archives: trade
Money Supply and the Current Account: Testing the Predictions of the AA-DD Model
Executive Summary: As part of his rationale for increasing tariffs, President Trump has focused on the U.S.’s trade deficits. Experts have long debated whether trade deficits matter; some argue a trade deficit simply signals that the region is attractive to foreign investment and has strong consumer demand, while others have instead contended that a trade … Continue reading
The Trade-Off Behind the Trade Deficit
Executive Summary Introduction President Trump has long called for the U.S. to impose higher tariffs to reduce the trade deficit, which he has declared a national emergency. His administration announced unprecedented unilateral tariffs to reverse what it alleges are unfair trade practices. This strategy ignores the accounting principle known as the balance of payments: The … Continue reading
How Biden Helped to Create Trump’s Unilateral Trade Policy Process
Executive Summary Introduction Throughout his time in office, President Biden was a persistent advocate of innovative executive branch tactics to restrict trade volumes and capital flows in and out of the United States. While Biden did not engage in the brinkmanship negotiation strategies President Trump has used over the past month, he did use the … Continue reading
Debt / Economy / Fiscal policy / Trade
The Twin Deficit Hypothesis: An Analysis of the U.S.
Executive Summary Introduction Government deficits and the trade balance have seemed to fluctuate in tandem over time. This has given rise to theories connecting the two deficits to explain their relationship. U.S. fiscal deficits have ballooned in recent years, bringing renewed attention to the twin deficit hypothesis (TDH) and applying it to advanced economies. Modeling … Continue reading
Playing Chicken with a Coyote: Why the U.S. has Less Leverage over Mexico than Trump Believes
Executive Summary Introduction In the 1955 movie A Rebel Without a Cause, James Dean introduced Americans to the game of “chicken,” wherein two cars accelerate towards each other until one swerves. The swerving car’s driver is labeled the “chicken,” and the steady driver wins. Eighty years later, the game of chicken is not just a … Continue reading
BRICS and Currency Diversification Challenge the Dollar
Executive Summary Introduction Since the inception of global trade, there has always been a dominant, trusted currency used to facilitate transactions between parties to avoid the double coincidence of wants associated with bartering. The U.S. dollar (USD) has been the premiere global currency since the Bretton Woods Agreement of 1944 where it was crowned in … Continue reading
From the Past to the Present: U.S. Protectionism
Since assuming office, President Trump has shaken the foundation of global trade with his use of tariffs. Tariffs, in simple terms, are taxes levied on imported goods. Trump’s intentions, in line with his America First campaign promise, are to boost the domestic manufacturing industry, reduce the U.S. trade deficit, and to leverage foreign countries into … Continue reading
Now vs. the ’90s: Comparing America’s Two Longest Expansions
Two economic roads have diverged in an American wood. Fortunately, America has been able to travel both. Today, July 1, the U.S. economy entered into its record-setting forty-first consecutive quarter of expansion, surpassing only the forty-quarter boom of the 1990s. What will become a quick clip in the twenty-four-hour news cycle should instead be a … Continue reading
Economy / Regulation / Stock Exchange / Trade
HFT Firms Manipulating NASDAQ
Threatening equity markets, stock manipulation is among the hottest topics for investors today. Michael Lewis, author of Flash Boys: A Wall Street Revolt, describes the U.S. stock market as rigged in favor of High Frequency Trading (HFT) firms. In a 60 Minutes edition, Lewis stated that these firms are able to “identify your desire to … Continue reading
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