The Macroeconomic Consequences of Import Tariffs and Trade Policy Uncertainty
IMF Working Papers, January 19, 2024
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Bibliographic details
- Authors: Lukas Boer, Malte Rieth
- Published: January 19, 2024
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400265143.001
Research question and method
- Objective: Estimate the macroeconomic effects of import tariffs and trade policy uncertainty in the United States.
- Empirical approach: Combines theory-consistent and narrative sign restrictions in Bayesian SVARs.
Core findings
- Protectionism yields mostly adverse consequences, in aggregate and across sectors and regions.
- Tariff shocks are more important than trade policy uncertainty shocks.
- Tariff shocks depress trade, investment, and output persistently.
- 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 4% over three years.
- The findings imply higher gains of trade than partial equilibrium or static trade models.
Key quantitative results
- General equilibrium import elasticity: –0.8
- Historical NAFTA/WTO output effect: 1-3% (for twenty years)
- Counterfactual: undoing 2018/19 measures → output increase of 4% over three years
- Paper length: 76 pages
- Series/issue identifiers: Working Paper No. 2024/013; Issue: 013; Volume: 2024
Subjects and keywords (as provided)
- Subjects: Exports, Imports, International trade, Tariffs, Taxes, Trade balance, Trade policy
- Keywords: equilibrium import elasticity, Exports, general equilibrium, Global, import tariff, Imports, international trade, narrative identification, North America, structural vector autoregressions, tariff shock, Tariffs, Trade balance, Trade policy, trade policy uncertainty shock, uncertainty shock, United States.
Source: IMF Working Paper — "The Macroeconomic Consequences of Import Tariffs and Trade Policy Uncertainty", Lukas Boer and Malte Rieth, January 19, 2024.
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