Harvard's Greene Doesn’t See a Massive Inflation Increase From Tariffs

The video discusses the economic impacts of US-China and US-Mexico trade wars, focusing on GDP and equity reductions. It highlights the challenges in modeling these impacts due to the complexity of tariffs and assumptions involved. The discussion extends to the effects on US consumers and businesses, noting margin compression and the reluctance to pass costs to consumers. Despite potential inflation concerns, businesses are expected to maintain price stability. The video concludes with an analysis of the economic repercussions and consumer burden, emphasizing the significant role of consumer spending in US GDP.

What is a major challenge in modeling the economic impact of tariffs?

• Complexity of currency fluctuations

• Inability to account for successive shocks

• Lack of historical data

• Overestimation of global growth

Why are businesses hesitant to pass increased costs onto consumers?

• Lack of competition

• High consumer demand

• Government regulations

• Fear of losing market share

What is the expected impact of tariffs on consumer goods?

• Decrease in consumer prices

• Increase in consumer prices

• Decrease in business profits

• No change in consumer prices

How much of US GDP is accounted for by consumer spending?

• 60%

• 50%

• 70%

• 80%

What financial challenge do many US households face according to the Fed study?

• Inability to handle a $400 emergency

• High levels of credit card debt

• Lack of retirement savings

• Inability to pay mortgage