The politics of trade is under the microscope today, but most people don't grasp how changes in one aspect of trade can reverberate throughout an economy. This enlightening examination from economists Galina Hale, Bart Hobijn, Fernanda Nechio and Doris Wilson of what goes into the cost of imports has important implications for US trade policy. Their rigorous and granular analysis will help to inform the debate among economists and policy experts.
In this summary, you will learn
- Why the United States is for the most part a closed economy,
- What factors determine the cost composition of an imported product and
- Why tariffs can affect the prices of domestic goods as well as of imports.
About the Authors
Galina Hale, Fernanda Nechio and Doris Wilson are researchers with the Federal Reserve Bank of San Francisco. Bart Hobijn is a professor at Arizona State University.