Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/283240 
Year of Publication: 
2024
Series/Report no.: 
DIW Discussion Papers No. 2072
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
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.
Subjects: 
Trade policy
international trade
structural vector autoregressions
narrative identification
general equilibrium
United States
JEL: 
C32
E30
F13
F14
Document Type: 
Working Paper

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