Macroeconomic Consequences of Tariffs

  title={Macroeconomic Consequences of Tariffs},
  author={Davide Furceri and Swarnali Ahmed Hannan and Jonathan David Ostry and Andrew K. Rose},
  journal={PSN: Trade Policy (Topic)},
We study the macroeconomic consequences of tariffs. We estimate impulse response functions from local projections using a panel of annual data that spans 151 countries over 1963-2014. We find that tariff increases lead, in the medium term, to economically and statistically significant declines in domestic output and productivity. Tariff increases also result in more unemployment, higher inequality, and real exchange rate appreciation, but only small effects on the trade balance. The effects on… 

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