CEU Electronic Theses and Dissertations, 2019
| Author | Hakobyan, Taguhi |
|---|---|
| Title | Measuring the Macroeconomic Impact of Tariffs on Steel and Aluminum: The Costs of Trade War |
| Summary | This paper analyzes the effects of increase of the US import tariff rates of Steel & Aluminum and the costs of trade war, when China increases tariff on imports from the US in response. The study uses New Keynesian open-economy framework, featuring nominal rigidities in prices, fexible exchange regime and introduction of multiple sectors in the economy. The tariffs are added in the model to assess the e ects of tariff shocks in the economy. The model closely follows the methodology used in Linde and Pescatori (2017) and Erceg et al. (2017), but deviates from the symmetry assumption, and adds sectors in the economy to see the effects of trade war when applied only on one specic sector. For the analysis, I use cross-country data on GDP, terms of trade, and tari s available at the World Trade Organization andWorld Bank. As a result, the unilateral increase in tariff rate on the sector of A&S decreases the US GDP, labor and nominal wages. China's retaliation worsens the effects on terms of trade and GDP. Trade war substantially o sets the real appreciation of the dollar. |
| Supervisor | Rots Eyno |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2019/hakobyan_taguhi.pdf |
Visit the CEU Library.
© 2007-2021, Central European University