The Macroeconomy After Tariffs

The Macroeconomy After Tariffs

What does the macroeconomy look like in the aftermath of tariff changes This paper estimates impulse response functions from local projections using a panel of annual data that spans 151 countries over 1963–2014. Tariff increases are associated wit...

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Main Authors: Furceri, Davide, Hannan, Swarnali A., Ostry, Jonathan D., Rose, Andrew K.
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2021
Subjects:
TARIFFS
OUTPUT
PRODUCTIVITY
UNEMPLOYMENT
INEQUALITY
EXCHANGE RATE
TRADE BALANCE
Online Access:http://documents.worldbank.org/curated/undefined/631111637243460329/The-Macroeconomy-After-Tariffs
http://hdl.handle.net/10986/36630
id okr-10986-36630
recordtype oai_dc
spelling okr-10986-366302021-12-03T05:10:38Z The Macroeconomy After Tariffs Furceri, Davide Hannan, Swarnali A. Ostry, Jonathan D. Rose, Andrew K. TARIFFS OUTPUT PRODUCTIVITY UNEMPLOYMENT INEQUALITY EXCHANGE RATE TRADE BALANCE What does the macroeconomy look like in the aftermath of tariff changes This paper estimates impulse response functions from local projections using a panel of annual data that spans 151 countries over 1963–2014. Tariff increases are associated with persistent, economically and statistically significant, declines in domestic output and productivity, as well as higher unemployment and inequality, real exchange rate appreciation and insignificant changes to the trade balance. Output and productivity impacts are magnified when tariffs rise during expansions and when they are imposed by more advanced or smaller (as opposed to developing or larger) economies; effects are asymmetric, being larger when tariffs go up than when they fall. While firmly establishing causality is always a challenge, the results are robust to a large number of perturbations to the baseline methodology, and hold using both macroeconomic and industry-level data. 2021-12-02T20:26:18Z 2021-12-02T20:26:18Z 2021-11 Working Paper http://documents.worldbank.org/curated/undefined/631111637243460329/The-Macroeconomy-After-Tariffs http://hdl.handle.net/10986/36630 English Policy Research Working Paper;No. 9854 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic TARIFFS
OUTPUT
PRODUCTIVITY
UNEMPLOYMENT
INEQUALITY
EXCHANGE RATE
TRADE BALANCE
spellingShingle TARIFFS
OUTPUT
PRODUCTIVITY
UNEMPLOYMENT
INEQUALITY
EXCHANGE RATE
TRADE BALANCE
Furceri, Davide
Hannan, Swarnali A.
Ostry, Jonathan D.
Rose, Andrew K.
The Macroeconomy After Tariffs
relation Policy Research Working Paper;No. 9854
description What does the macroeconomy look like in the aftermath of tariff changes This paper estimates impulse response functions from local projections using a panel of annual data that spans 151 countries over 1963–2014. Tariff increases are associated with persistent, economically and statistically significant, declines in domestic output and productivity, as well as higher unemployment and inequality, real exchange rate appreciation and insignificant changes to the trade balance. Output and productivity impacts are magnified when tariffs rise during expansions and when they are imposed by more advanced or smaller (as opposed to developing or larger) economies; effects are asymmetric, being larger when tariffs go up than when they fall. While firmly establishing causality is always a challenge, the results are robust to a large number of perturbations to the baseline methodology, and hold using both macroeconomic and industry-level data.
format Working Paper
author Furceri, Davide
Hannan, Swarnali A.
Ostry, Jonathan D.
Rose, Andrew K.
author_facet Furceri, Davide
Hannan, Swarnali A.
Ostry, Jonathan D.
Rose, Andrew K.
author_sort Furceri, Davide
title The Macroeconomy After Tariffs
title_short The Macroeconomy After Tariffs
title_full The Macroeconomy After Tariffs
title_fullStr The Macroeconomy After Tariffs
title_full_unstemmed The Macroeconomy After Tariffs
title_sort macroeconomy after tariffs
publisher World Bank, Washington, DC
publishDate 2021
url http://documents.worldbank.org/curated/undefined/631111637243460329/The-Macroeconomy-After-Tariffs
http://hdl.handle.net/10986/36630
_version_ 1764485644608864256

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