Holy cow, the Brookings Institution is trolling President Trump with the title on the webpage. The title of the report is a bit different. We live in interesting times:
In “The role of border carbon adjustments in a U.S. carbon tax,” Warwick McKibbin, Adele Morris, Peter Wilcoxen, and Weifeng Liu examine carbon tax design options in the United States using a model of the global economy. Through four policy scenarios the authors explore two overarching issues: (1) the effects of a carbon tax under alternative assumptions about the use of the resulting revenue, and (2) the effects of a system of import charges on carbon-intensive goods (“border carbon adjustments”). ...
In sum, a carefully designed carbon tax in the United States can reduce emissions significantly with minimal effect on the economy. McKibbin et al. find no evidence of meaningful emissions leakage abroad, even when the U.S. policy is unilateral. Using carbon tax and [border carbon adjustment] revenue to reduce distortionary taxes produces better economic outcomes overall and for most individual sectors. To the extent that policymakers wish to protect the interests of energy-intensive trade-exposed industries with [border carbon adjustments] on imports, they should endeavor to tailor the adjustments to narrow, particularly vulnerable, subsectors so as not to inadvertently appreciate the U.S. dollar and do more harm than good overall.
Following Brookings lead, who knew that foreign exchange could be so complicated?
President Donald Trump once called National Security Adviser Mike Flynn at 3 a.m. to ask about the economic impact of a strong US dollar, according to a report from The Huffington Post.
SV Date and Christina Wilke, citing sources with knowledge of the conversation, reported that Trump asked Flynn whether the strong dollar was good or bad for the US economy during the early-morning phone call. According to the sources, Flynn said he was not sure and Trump should ask an economist instead.
