Trump likes to know where his suits come from. His tariffs could now upend the world’s fashion supply chains

Rawpixel.com/ShutterstockUS president Donald Trump has a particular look. Sharp navy suits, overly long ties and crisp white shirts, always structured to command attention. It’s a power uniform rooted in a very traditional idea of masculine elegance. Trump wants it to look expensive, meticulously crafted, consistent, and entirely his own.

Beware of large shocks! A non-parametric structural inflation model

We propose a novel empirical structural inflation model that captures non-linear shock transmission using a Bayesian machine learning framework that combines VARs with non-linear structural factor models. Unlike traditional linear models, our approach allows for non-linear effects at all impulse response horizons. Identification is achieved via sign, zero, and magnitude restrictions within the factor model. Applying our method to euro area energy shocks, we find that inflation reacts disproportionately to large shocks, while small shocks trigger no significant response.

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