Macro Implications of the Republican Party Platform (If Accomplished)

Genevieve Signoret & Delia Paredes

(Hay una versión en español de este artículo aquí.)

Traders are bidding up bitcoin and gold purportedly because they expect Trump to win and see his policies as inflationary. So we took a deep dive into his party’s (very Trumpist) economic platform to see whether we agreed, and to gauge each policy proposal’s likely effects on growth and geopolitical risk as well as inflation. In each case, we assumed that the policies outlined would in fact be accomplished―a strong assumption!

In the table below we summarize our findings. Depending on the column, plus signs mean we think the proposed policy will be inflationary or pro-growth or will exacerbate already heightened geopolitical risk. Minus signs, the opposite.

Likely effects of Republican Party policy proposals on inflation, growth, and geopolitical risk, assuming passage and execution

Source: 2024 Republican Party Platform | The American Presidency Project (ucsb.edu)

The Republican Party’s immigration, fiscal, and trade policies are pro-inflation and anti-growth. Its foreign, energy, industrial, housing, and health care policies are the opposite: disinflationary and pro-growth.

Six of the party’s policy proposals can trigger changes in the level of geopolitical tensions. Of these, two will likely exacerbate already heightened geopolitical tensions further: the proposal to achieve a zero trade balance and the proposal to protect American industry. Both would require imposing trade policies bound to anger allies, weakening the country’s critical alliances and thus rendering the United States more vulnerable to the anti-American partnership formed by China, Iran, North Korea, and Russia. The remaining four would likely have the opposite effect by tightening U.S. security.

Once the Democratic Party has published its platform, we’ll repeat a parallel exercise.

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