Economics Dictionary of ArgumentsHome
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| Tariff responsivity: In economics, tariff responsivity refers to how much import demand (or related economic variables) responds to changes in tariffs. It essentially measures the elasticity of various economic factors - like import volumes, prices, or trade balances - to the imposition or removal of tariffs. A high responsivity means even small tariff changes have a significant impact. See also Tariffs, Elasticity._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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IMF Working Papers on Tariff Responsivity - Dictionary of Arguments
Rieth I 25 Tariff responsivity/Boer/Rieth: Tariff level shocks explain half of the impact variability in customs duties, documenting an important role for exogenous policy changes. The tariff shocks are also relevant for the variation in exports and imports, contributing 10-18%. Their explanatory power for fluctuations in the nominal exchange rate and consumer prices is lower at the 1-2 year horizon, but increases to 10-15% in the 8th year. Given their importance for import and export fluctuations, the shocks also drive US output. The contribution to unexpected GDP volatility is close to 10% for most quarters. Rieth I 26 Trade policy/uncertainty: The relevance of trade policy uncertainty shocks for the variability in exports, imports, and output is about half of the relevance of tariff shocks. They explain a bit less than 5% of the forecast errors at short horizons and a little more than 5% at longer horizons. As they affect imports, they also drive customs duties. But the impact explanation is negligible, suggesting that the identified exogenous variation in the uncertainty index is not due to tariff changes. Instead, the uncertainty shocks account for more than half of the impact variation in the uncertainty index. At the same time, this number indicates that recursive identification strategies assuming that trade policy uncertainty is exogenous may lead to biased results as half of the variation in the measure is an endogenous response to other shocks. Taken together, the high fraction of the variance explained by own shocks of custom duties and trade policy uncertainty adds to the evidence that the model successfully disentangles first and second moment shocks to US trade policy. >Market uncertainty, >Economic uncertainty, >US Import Tariffs, >Tariff history. Rieth I 30 Tariff responsivity/Boer/Rieth: Comparing the effects of level and uncertainty shocks indicates that the former are more detrimental to US sectoral economic activity than the latter. Tariffs reduce US international trade and investment in most sectors. Higher trade policy uncertainty also reduces sectoral investment but raises exports and partially imports. - - - Jaumotte I 4 Tariff responsivity/Tariff impacts/value chains/Eugster/ Jaumotte/MacDonald/Piazza: The increases in bilateral tariffs between the US and China applied to goods at different places in the value chain (e.g., from steel to washing machines), while tariffs on and among other countries were much less affected. This raises the question to what extent countries and sectors not directly targeted by US and Chinese tariffs would also be affected, either through lower demand for their intermediate exports, which for instance were assembled in China, higher costs for intermediate inputs or lower competition in export markets. Several theoretical contributions have investigated this question and stressed that while China and the US are hurt the most by higher bilateral tariffs, other countries may either benefit or suffer depending on their sectoral composition (see IMF 2019(1) and references therein). >US Import Tariffs, >Tariff responsivity, >Tariff impacts, >Tariffs. 1. Caceres, Carlos, Rui Mano and Diego A. Cerdeiro, 2019. "Trade Wars and Trade Deals: Estimated Effects using a Multi-Sector Model," IMF Working Papers 2019/143, International Monetary Fund._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
IMF Working Papers Rieth I Malte Rieth Lukas Boer The Macroeconomic Consequences of Import Tariffs and Trade Policy Uncertainty. IMF Working Paper 24/13. International Monetary Fund. Washington, D.C. 2024 Jaumotte I Florence Jaumotte Johannes Eugster Margaux MacDonald, The Effect of Tariffs in Global Value Chains. IMF Working paper 22/40. International Monetary Fund. Washington, D.C. 2022 |
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