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Estimating the Impacts of Tariff Changes

5 Sep 2018

'We build upon new developments in the international trade literature to construct a quantitative Ricardian framework similar to Caliendo and Parro (2015) to isolate and estimate the long-run economic impacts of tariff changes. Our framework incorporates the most recent data and shows that the trade elasticities have changed considerably since the 1990s - highlighting the need to use recent data to quantitatively evaluate newly imposed and proposed tariff schedules. We apply our model and use our estimated elasticities to measure the long-run economic impact of the recently announced US tariffs on steel and aluminium and the first round of additional tariffs between the United States and Chine. Our results suggest that modifying the current global tariff schedules would imply considerable changes in trade flows and sectoral reallocations, but modest impacts on long-run output levels.'
china economics economy export exchange rate canada business comparative advantage economic equilibrium labour mathematics prices demand equilibrium input-output most-favoured-nation economic environment sequilibrium ricardian model trans-paci?c partnership
ISSN
23699639
Pages
18
Published in
Ottawa, ON, CA

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