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TPU INVESTMENT DAMAGE MODEL — UNITED STATES 2025
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Based on Caldara et al. (2020) | ECB-cleaned index as central case | Updated July 2026
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KEY RESULTS (ECB-cleaned index = central case)
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Lower bound: ECB-cleaned avg shock x Caldara low (1.0%)~$66B
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CENTRAL ESTIMATE: ECB-cleaned avg shock x Caldara central (1.5%)~$99B
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Central-high: ECB-cleaned avg shock x Caldara high (2.0%)~$132B
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Raw upper bound: Raw avg shock x Caldara high (2.0%)~$659B
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WHY THE ECB-CLEANED INDEX IS THE CENTRAL CASE
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The raw EPUTRADE index in 2025 spiked ~10x above the 2018 benchmark. Applied linearly to Caldara's VAR, this implies investment damage of $329–659B — implausible given US private nonres. investment only totals $4.25T.
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The ECB (Schroeder, Jan 2026) strips co-movement with geopolitical risk, VIX, general EPU, financial conditions, and supply-chain stress from the raw index. The cleaned indicator retains only 20% of the raw spike — i.e. the part specific to trade policy uncertainty rather than general macro anxiety.
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On the cleaned basis, the 2025 average shock is ~2.1x the 2018 benchmark — a large but tractable multiple within the VAR's estimation range. The resulting ~$99B central estimate aligns with IMF WEO ($30–85B), ICC/Oxford Economics (US share ~$80B), and the OECD GDP-drag back-calculation (~$63B).
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CAVEAT: The ECB cleaning may over-correct if VIX/GPR spikes in 2025 were themselves caused by trade policy (e.g. Liberation Day). The raw-index scenarios are retained as upper bounds for this reason.
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SHEET GUIDE
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 AssumptionsAll hardcoded inputs — edit BLUE cells to run scenarios
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 TPU Index DataMonthly EPUTRADE values; raw and ECB-cleaned std-dev equivalents
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 Shock ScalingLevel-ratio multipliers; percentage investment hits
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 Investment ImpactDollar damage by scenario; CENTRAL highlighted in amber
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 Scenario MatrixFull grid: ECB-cleaned (central zone) vs raw (upper bound zone)
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 Cross-ChecksExternal estimate comparison: IMF, OECD, ICC/Oxford
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 SourcesFull citation log and methodology caveats
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