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Abstract The macroeconomic effects of U.S. tariffs and foreign retaliation have been surprisingly small to date. Does this mean that the macroeconomic effects of the collapse of the global trading… Click to show full abstract
Abstract The macroeconomic effects of U.S. tariffs and foreign retaliation have been surprisingly small to date. Does this mean that the macroeconomic effects of the collapse of the global trading system would also be limited? I consider different perspectives on this limited macroeconomic fallout, including (i) that it takes a lot of Harberger Triangles to fill an Okun's gap; (ii) that the macroeconomic fallout is coming but has yet to materialize; and (ii) that the largest effects operate through the impact on global geopolitics and cooperation (or lack thereof).
Journal Title: Journal of Policy Modeling
Year Published: 2020
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