To What Extent Are Tariffs Offset By Exchange Rates? / Olivier Jeanne, Jeongwon Son.

Format:

Book

Author/Creator:

Jeanne, Olivier.

Contributor:

National Bureau of Economic Research.

Son, Jeongwon.

Series:

Working Paper Series (National Bureau of Economic Research) no. w27654.

NBER working paper series no. w27654

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

In theory, we should expect tariffs to be partially offset by a currency appreciation in the tariff-imposing country or by a depreciation in the country on which the tariff is imposed. We find, based on a calibrated model, that the tariffs imposed by the US in 2018-19 should not have had a large impact on the dollar but may have significantly depreciated the renminbi. This prediction is consistent with a high-frequency event analysis looking at the impact of tariff-related news on the dollar and the renminbi. We find that tariffs explained at most one fifth of the dollar effective appreciation but around two thirds of the renminbi effective depreciation observed in 2018-19.

Notes:

Print version record

August 2020.