{
  "id": 2300553,
  "title": "More evidence on the effects of recent tariffs",
  "url": "https://urgent.news/2026/08/21/more-evidence-on-the-effects-of-recent-tariffs",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-21T04:41:32.000Z",
  "source": {
    "name": "Marginal Revolution",
    "slug": "marginal-revolution",
    "url": "https://marginalrevolution.com/marginalrevolution/2026/08/more-evidence-on-the-effects-of-recent-tariffs.html"
  },
  "original_language": "en",
  "account": "Recent tariff hikes in the United States have reached levels not experienced since the Great Depression, yet imports have continued to rise. Economists have created a model to explain this phenomenon, accounting for tariff heterogeneity, inventories, and shocks to investment, including those related to the AI-driven boom. This model accurately predicts the untargeted trends in imports, output, and inflation. If the investment boom had not occurred, imports would have dropped by 10 percent and economic activity would have declined by 0.7 percent.\n\nThe impact of the tariffs varies depending on the type of goods being taxed. Tariffs on consumption and intermediate goods behave like supply-side shocks, while tariffs on capital goods act more like demand-side shocks. By focusing the tariff increases on consumption goods and sparing capital goods to a certain extent, the damage to output has been limited, though the inflationary effects have been enhanced. This analysis is detailed in a new working paper by Francesco Ferrante, Andrea Prestipino, Andrea Raffo, and Michael E. Waugh, published by the National Bureau of Economic Research.",
  "summary": "Trump is giving economists something to write papers about: U.S. tariff rates in 2025 rose to levels not seen since the Great Depression, yet imports increased. To account for the missing trade collapse, we develop an open-economy New Keynesian model with tariff heterogeneity, inventories, and shocks to investment that capture the AI-driven boom. The model […] The post More evidence on the…",
  "key_points": [
    "Tariffs at levels not seen since Great Depression",
    "Imports rise despite tariff hikes",
    "Model predicts untargeted economic trends"
  ],
  "editors_take": "The tariff strategy's focus on consumption goods while sparing capital goods has limited economic damage but enhanced inflationary effects, according to a new economic model and analysis.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}