\nIn yesterday’s post<\/a> I mention a calculation apparently meant to model theoretical tariffs on US exports. As I understand, said formula, which looks somewhat like t=(x-m)\/(εφm), has t as the theoretical tariff, x as US exports to that country, and m as US imports from that same country. Then, there are epsilon, which is ε, and phi, φ.<\/p>\n \nAs I understand, ε is meant to be the elasticity of demand with respect to price (see my post here<\/a>), while φ is meant to be the passthrough. The passthrough seems to be the factor by which a tariff increases the price; for example, passthrough of 0.5 might suggest that for every dollar amount of tariff, the consumer sees a price increase of fifty cents.<\/p>\n \nInterestingly, it seems ε is set to -4, for now, while φ is set to 0.25. Therefore, their product is -1. In that case, the formula becomes x=(x-m)\/(-m).<\/p>\n \nThere is likely more to say about this intriguing formula and its assumptions. I hope to follow up:)<\/p>\n Source:<\/p>\n ustr.gov<\/a><\/p>\n bankofcanada.ca<\/a><\/p>\n science.co.il<\/a><\/p>\nJack of Oracle Tutoring by Jack and Diane,<\/a> Campbell River, BC.\n \n","protected":false},"excerpt":{"rendered":" Self-tutoring about trade and economics: the tutor mentions some parameters from the apparent theoretical tariff calculation. In yesterday’s post I mention a calculation apparently meant to model theoretical tariffs on US exports. As I understand, said formula, which looks somewhat …<\/p>\n