How Harvard Researchers Accidentally Doubled the Tariff Effect
When Federal Reserve Chair Jerome Powell cited rising import prices as evidence that tariffs are driving inflation , he was almost certainly relying on a new Harvard Business School study. The paper’s headline finding: imported goods prices rose “roughly twice as much” as domestic ones—a 1.8x ratio that suggests tariffs are having a dramatic, differential impact on traded goods.
There’s just one problem: that finding depends entirely on two questionable methodological choices that happen to maximize the measured effect. Make equally defensible alternative choices, and the gap…
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