Munich Personal RePEc Archive

Do Import Tariffs Generate Stagflationary Tendencies?

Mohammed, Mikidadu (2018): Do Import Tariffs Generate Stagflationary Tendencies?

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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.

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