The macroeconomic consequences of import tariffs and trade policy uncertainty

Arbeitspapier

We estimate the macroeconomic effects of import tariffs and trade policy uncertainty in the United States, combining theory-consistent and narrative sign restrictions on Bayesian SVARs. We find mostly adverse consequences of protectionism. Tariff shocks are more important than trade policy uncertainty shocks. Tariff shocks depress trade, investment, and output persistently, in aggregate and across sectors and space. The general equilibrium import elasticity is -0.8. Historically, NAFTA/WTO raised output by 1-3% for twenty years. Undoing the 2018/19 measures would raise output by cumulatively 4%. The findings imply higher output costs of protectionism than partial equilibrium or static trade models.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DIW Discussion Papers ; No. 2072

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models ; Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) ; Trade Policy; International Trade Organizations ; Empirical Studies of Trade
• Subject: Trade policy ; international trade ; structural vector autoregressions ; narrative identification ; general equilibrium ; United States

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Boer, Lukas ; Rieth, Malte
• Event: Veröffentlichung
• (who): Deutsches Institut für Wirtschaftsforschung (DIW)
• (where): Berlin
• (when): 2024

Further information

• Handle: http://hdl.handle.net/10419/283240
• Last update: 10.03.2025, 11:44 AM CET