Imports feature at all stages of production as well as in final consumption, and this is key to how tariff shocks play out. If imposed on imports in upstream sectors, import tariffs lower domestic output in downstream sectors; if imposed downstream, they raise upstream production. The aggregate...

This paper examines the impact of growth of the service sector on economic fluctuations and its underlying mechanisms from the perspective of global production networks. We analyze this mechanism by constructing general equilibrium model of production networks and empirically test it by using...