Research
Working Papers
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The Macroeconomic Effects of Tariffs: Evidence From U.S. Historical Data
We study the macroeconomic effects of tariff policy using U.S. historical data from 1840–2024. We construct a narrative series of plausibly exogenous tariff changes – based on major legislative actions, multilateral negotiations, and temporary surcharges – and use it as an instrument to identify a structural tariff shock. Tariff increases are consistently contractionary: imports fall sharply, exports decline with a lag, and output and manufacturing activity drop persistently. The shock transmits through both supply and demand channels. Prices rise in the full sample but fall post-WWII, a pattern consistent with changes in the monetary policy response and with stronger international retaliation and reciprocity in the modern trade regime.
Coverage: Marginal Revolution, WSJ
Policy Publications
- Geopolitical fragmentation risks and international currencies
- Valuation effects and rebalancing of official foreign exchange reserves
- Investment funds and search for yield within the sovereign debt market of highly-rated issuers
Theses
- Wage Rigidities, Monetary Policy and Inequality: Insights from a Three-Agent New Keynesian Model
- The Effect of Regional Import Competition on the Voting Share for EU-Exit Parties