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Featured Research |
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Analyzing the Economic Impact
of Tariffs |
There remains active debate regarding the impact of tariffs on inflation and economic activity, particularly in the context of the recent U.S. tariff policies. In a new paper, authors developed a novel framework to decompose the impact of tariffs on inflation, output, and exchange rate into channels that account for demand shifts, policy effects, exchange rate adjustments, expectations, price stickiness, and input–output linkages.
The research replicates the observed impact of the 2018 tariffs on the U.S. economy and provides forward-looking predictions for a potential trade war associated with the proposed 2025 U.S. tariffs. In the baseline no-retaliation scenario, the model predicts a 0.5 percentage point increase in inflation, a 0.8% decline in output, and a 10% appreciation of the U.S. dollar. Under full retaliation, output declines by 1.6% and inflation rises by 0.8 percentage points. They also find that pure tariff threats—cases in which tariffs are announced but not implemented—are self-defeating.
Read the paper >> | | |
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Charting Growth Strategies in Hermosillo, Mexico |
As part of our research agenda on cities as engines of economic growth, our research team spent several months diagnosing Hermosillo's economic challenges, identifying growth opportunities, and designing an economic development strategy.
Hermosillo lacks a diversified manufacturing sector and could benefit from green value chains, nearshoring, and export of services. Binding constraints to growth include sustainable water management and improved urban planning, particularly in housing and public transportation. We worked with local stakeholders to develop a concrete roadmap, policy recommendations, and action plans, engaging policymakers and experts to shape Hermosillo’s future.
Explore our research >> | | |
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New Research Agenda to Diagnose the Current Crisis and Drive Economic Growth in Bolivia |
The Growth Lab has launched a new research agenda to investigate Bolivia’s economic challenges and formulate strategic policy options for stronger and more sustainable economic growth. The multidisciplinary research team will be led by Ricardo Hausmann, and the work will draw on perspectives and expertise from across Harvard University, and policymakers and researchers in Bolivia.
Bolivia has been grappling with slowing economic growth, compounded by the depletion of its international reserves, wide fiscal deficits, and exchange rate difficulties.
Read the media release >> | | |
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WHAT WE'RE WORKING ON |
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Atlas 11.0 delivers 2023 trade data, updated Country Profiles, country growth projections to 2033, and new ECI rankings. | | |
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Around the World
Snapshots from recent trips to Indonesia, Morocco, Spain, and Switzerland. |
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Ricardo Hausmann holds a fireside chat with a few dozen members of the Harvard Club of Indonesia on a recent trip to Jakarta. | | | | | |
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WHAT WE'RE WATCHING |
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Ricardo Hausmann reflects on Cambodia’s economic trajectory and priorities and Australia’s contribution in supporting its economic transformation. | | |
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