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Tariffs and the macroeconomy: evidence from the USA

Author

Listed:
  • Andrew K. Rose
  • Jonathan D. Ostry

Abstract

This paper examines the macroeconomic impact of tariffs. The effects of unilateral tariff changes are reviewed in a variety of theoretical models. Three different sets of data are consistent with the hypothesis that tariff rates have no significant effect on a system consisting of the real exchange rate, the real trade balance, and real output (both foreign and domestic) .

Suggested Citation

  • Andrew K. Rose & Jonathan D. Ostry, 1989. "Tariffs and the macroeconomy: evidence from the USA," International Finance Discussion Papers 365, Board of Governors of the Federal Reserve System (U.S.).
  • Handle: RePEc:fip:fedgif:365
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    File URL: http://www.federalreserve.gov/pubs/ifdp/1989/365/default.htm
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    File URL: http://www.federalreserve.gov/pubs/ifdp/1989/365/ifdp365.pdf
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    References listed on IDEAS

    as
    1. Stock, James H & Watson, Mark W, 1988. "Variable Trends in Economic Time Series," Journal of Economic Perspectives, American Economic Association, vol. 2(3), pages 147-174, Summer.
    2. Eichengreen, Barry J., 1981. "A dynamic model of tariffs, output and employment under flexible exchange rates," Journal of International Economics, Elsevier, vol. 11(3), pages 341-359, August.
    3. Rudiger Dornbusch, 1987. "External Balance Correction: Depreciation or Protection," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(1), pages 249-270.
    4. Morris Goldstein & Mohsin S. Khan, 2017. "Income and Price Effects in Foreign Trade," World Scientific Book Chapters,in: TRADE CURRENCIES AND FINANCE, chapter 1, pages 3-81 World Scientific Publishing Co. Pte. Ltd..
    5. Gardner, Grant W & Kimbrough, Kent P, 1989. "The Behavior of U.S. Tariff Rates," American Economic Review, American Economic Association, vol. 79(1), pages 211-218, March.
    6. Krugman, Paul, 1982. "The macroeconomics of protection with a floating exchange rate," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 16(1), pages 141-182, January.
    7. Mussa, Michael, 1974. "A Monetary Approach to Balance-of-Payments Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 6(3), pages 333-351, August.
    8. Engle, Robert F. & Yoo, Byung Sam, 1987. "Forecasting and testing in co-integrated systems," Journal of Econometrics, Elsevier, vol. 35(1), pages 143-159, May.
    9. Andrew K. Rose, 1991. "Why Has Trade Grown Faster than Income?," Canadian Journal of Economics, Canadian Economics Association, vol. 24(2), pages 417-427, May.
    10. Razin, Assaf & Svensson, Lars E. O., 1983. "Trade taxes and the current account," Economics Letters, Elsevier, vol. 13(1), pages 55-57.
    11. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    12. Russell S. Boyer, 1977. "Commercial Policy under Alternative Exchange Rate Regimes," Canadian Journal of Economics, Canadian Economics Association, vol. 10(2), pages 218-232, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Tariff ; Balance of trade ; Foreign exchange rates;

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