Trade is a self-imposed supply shock—tariffs make all the things we buy more expensive, raising the price level, which makes people poorer, reduces demand, and increases unemployment by combining inflation and unemployment effects

causalpending

Speaker

Larry Summers

Evidence Quote

I think the simplest way to think about this is as a self-imposed supply shock. We're going to take all the things we buy and we're going to make them more expensive.

Source

Tariffs, Decline, and the Promise of AI | A Conversation with Larry Summers and Niall FergusonUniversity of Austin (UATX)
Created: 8/11/2026, 6:52:24 AM

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