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The Macroeconomic Effects of Tariffs: Insights from 180 Years of US Trade Policy
The sharp increase in US tariff rates in 2025 has renewed interest in the macroeconomic effects of tariffs. Yet surprisingly little evidence exists on this topic. Most studies rely on post–World War II data—a period with relatively modest movements in average tariff rates—and focus on narrow outcomes, such as relative price changes, industry-level effects, or bilateral trade flows. Consequently, the aggregate effects of tariffs on output, prices, and trade are less well understood.
Calibrating Monetary Policy
How do policymakers decide on a path for interest rates that best achieves the Federal Reserve’s dual mandate of ensuring price stability and maximum employment? This question is at the heart of U.S. monetary policy, and it is extraordinarily difficult to answer. To achieve the dual mandate, Fed policymakers adjust the current and anticipated future levels of the federal funds rate—the policy path (Choi et al. 2022).
The Macroeconomic Effects of Tariffs: Insights from 180 Years of U.S. Trade Policy
This paper unifies and extends two prior working papers: “The Macroeconomic Effects of Tariffs: Evidence from U.S. Historical Data” (Den Besten and Känzig) and “What Is a Tariff Shock? Insights from 150 Years of Tariff Policy” (Barnichon and Singh).
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