Can I summarize as follows: Responding to Trump's tariffs by retaliating with higher tariffs is economically foolish but is likely to happen because people take Trump's tariffs as an affront to their nation?
You are right, I am long winded! The "insider" point here is that there is a mildly interesting insight to be had by melding Akerlof and Kranton's ideas into vanilla international trade. The empirical challenge here is to measure how "angry" is Canada? Are they just faking it as this big game of bluffing now unfolds. Put simply, how good a poker player is President Trump?
Can I summarize as follows: Responding to Trump's tariffs by retaliating with higher tariffs is economically foolish but is likely to happen because people take Trump's tariffs as an affront to their nation?
You are right, I am long winded! The "insider" point here is that there is a mildly interesting insight to be had by melding Akerlof and Kranton's ideas into vanilla international trade. The empirical challenge here is to measure how "angry" is Canada? Are they just faking it as this big game of bluffing now unfolds. Put simply, how good a poker player is President Trump?
Long-winded is good when it means plenty of useful detail!