2023/05/25 by Daniel R. Carroll, Sewon Hur · 1 voice · 1 citation
Economics, Econometrics and Finance · Health Professions · #Fiscal Policy and Economic Growth #Taxation and Compliance Studies #Global Health Care Issues
paper · doi:10.1111/iere.12648
Abstract We provide a quantitative analysis of the distributional effects of the 2018 increase in tariffs by the United States and its major trading partners. We build a trade model with incomplete asset markets and households that are heterogeneous in their age, income, wealth, and labor skill. When tariff revenues are used to reduce distortionary taxes on consumption, labor, and capital income, the average welfare loss from the trade war is equivalent to a permanent 0.1% reduction in consumption. Much larger welfare losses are concentrated among retirees and low‐wealth households, whereas only wealthy households experience a welfare gain.