The Optimal Monetary Policy Response to Tariffs

Javier Bianchi, Louphou Coulibaly

What is the optimal monetary policy response to tariffs? This paper explores this question within an open-economy New Keynesian model and shows that the optimal monetary policy response is expansionary, with inflation rising above and beyond the direct effects of tariffs. This result holds regardless of whether tariffs apply to consumption goods or intermediate inputs, whether the shock is temporary or permanent, and whether tariffs address other distortions

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Year of publication:	March 2025
Authors:	Bianchi, Javier ; Coulibaly, Louphou
Institutions:	National Bureau of Economic Research (issuing body)
Publisher:	Cambridge, Mass : National Bureau of Economic Research
Subject:	Zoll \| Tariffs \| Zollpolitik \| Tariff policy \| Geldpolitik \| Monetary policy \| Neoklassische Synthese \| Neoclassical synthesis

Extent:	1 Online-Ressource illustrations (black and white)
Series:	NBER working paper series ; no. w33560
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Hardcopy version available to institutional subscribers
Other identifiers:	10.3386/w33560 [DOI]
Classification:	E24 - Employment; Unemployment; Wages ; E44 - Financial Markets and the Macroeconomy ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; F13 - Commercial Policy; Protection; Promotion; Trade Negotiations ; F41 - Open Economy Macroeconomics
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10015361436