A new paper by Furceri, Hannan, Ostry and Rose uses data from 151 countries between 1963 and 2014 to show how tariffs affect advanced and emerging market economies. They find that a one standard deviation (or 3.6 percentage point) tariff increase leads to a decrease in output of about 0.4% five years later, a cumulative fall in labour productivity by 0.9%, real exchange rate appreciation over the short term and small and insignificant impacts on the trade balance.
