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Do Import Tariffs Generate Stagflationary Tendencies?

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  • Mohammed, Mikidadu

Abstract

The recent U.S. trade policy shift has reignited interest about the macroeconomic effects of import tariffs. This paper examines the impacts of import tariff shocks on U.S. macroeconomic performance using quarterly data from 1989-2017. Relying upon the estimation of structural VAR model with sign restrictions, the results suggest that tariff shocks on net-imported vital intermediate input, such as steel, trigger stagflationary tendencies as characterized by short-run increase in inflation and unemployment and decline in real output.

Suggested Citation

  • Mohammed, Mikidadu, 2018. "Do Import Tariffs Generate Stagflationary Tendencies?," MPRA Paper 95128, University Library of Munich, Germany, revised 09 Apr 2019.
    • Handle: RePEc:pra:mprapa:95128
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    More about this item

    Keywords

    import tariff shocks; steel; stagflation; structural VAR;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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