Macroeconomics Tariffs. 2025b), we conduct an analysis of the effects of the “Lib

2025b), we conduct an analysis of the effects of the “Liberation Day” tariffs in a two-country New One such imposition is a tariff (a tax on imported or exported goods and services). Second, by distorting Abstract. What does the macroeconomy look like in the aftermath of tariff changes? This study estimates impulse response functions We quantify the macroeconomic effects of the tariff measures announced (but not entirely implemented yet) on Liberation Day (April 2nd, 2025) through the lens of What are tariffs and how do they affect consumers, firms and the economy? An explanation of tariffs with diagrams to explain who are the winners and losers ABSTRACT We study the macroeconomic consequences of tariffs. This tax can affect prices, trade We study the macroeconomic consequences of tariffs. We find that temporary tariffs cause a recession whenever the import elasticity is below an openness-weighted average of the export elasticity and the intertemporal substitution elasticity. In this paper, we formalize this intuition and shed further light on existing results using a simple model that highlights how tariffs distort the use of intermediate inputs— highly relevant in a world with large In a recent paper (Auray et al. Larger tariffs reduce the openness of the economy, including Unilateral tariffs tend to improve the trade balance, but when other countries retaliate the trade balance worsens and the contraction President Trump’s tariff moves have jolted markets and thrust business leaders into deep uncertainty. Developing a better understanding of To shed light on the macroeconomics of tariff shocks and the optimal policy response to them, it is instructive to compare them explicitly to other (standard) supply shocks We study the macroeconomic consequences of tariffs. Discover the history of tariffs and some of their pros and cons. While these events have motivated a recent swell in research on the macroeconomic effects of trade policy, this nascent literature has mostly relied on real models ABSTRACT: We estimate the macroeconomic effects of import tariffs and trade policy uncertainty in the United States, combining theory-consistent and narrative sign restrictions in Bayesian SVARs. We find that temporary tariffs cause a A tariff is a fancy word for a tax. Learn about tariffs and how they affect trade. First, tariffs exert inflationary pressure by directly raising the cost of imported goods—affecting both final consumer products and intermediate inputs used by domestic producers. See how a tariff impacts price, consumer surplus, producer surplus, tax revenue, and deadweight loss in this video. By making imported goods more expensive, tariffs aim to The chief data set is aggregate in nature, but sectoral data are also used, both to control for macroeconomic shocks that may drive tariff changes and to identify some of the channels through We estimate the macroeconomic effects of import tariffs and trade policy uncertainty in the United States, combining theory-consistent and This analytical note presents a model-based analysis of the potential impact of tariff policies under Trump’s second administration. This Special Topic presents estimates of the effects of the US tariff announcements up to 2 April 2025, alongside hypothetical symmetric ABSTRACT We study the short-run effects of import tariffs on GDP and the trade balance in an open-economy New Keynesian model with intermediate input trade. Click here to read the full article. We estimate impulse response functions from local projections using a panel of . We estimate impulse response functions from local projections using a panel of annual data that spans 151 countries over They outline how both direct and indirect effects—from inflation and supply chain disruptions to policy missteps and competitiveness risks—could reshape global economic dynamics. This Bulletin explores the macroeconomic implications of tariffs, discussing propagation channels and presenting quantitative estimates of their growth and inflation impacts. A tariff is a tax imposed by a government on imported goods, making foreign products more expensive and protecting domestic industries from foreign competition. The term usually refers to import duties, which are fees levied on goods entering one country from The imposition of high tariffs by President Donald Trump yesterday suggests a review of the elementary economics of this sort of Tariffs are taxes imposed by a government on imported goods, designed to increase the cost of foreign products and protect domestic industries. We estimate impulse response functions from local projections using a panel of annual data that spans 151 countries over 1963 The Macroeconomics of Tariff Shocks We study the short-run effects of import tariffs on GDP and the trade balance in an open-economy New Keynesian model with intermediate input trade. Broader Economic Impact: Many existing trade and macroeconomic models fail to capture the full harm caused by tariffs.

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