https://jeremyxtmeng.github.io/tags/production-network/Recent content in Production Network on Jeremy MengHugoen-usThu, 01 Jan 2026 22:55:34 +0000https://jeremyxtmeng.github.io/portfolio/tariff_3/Thu, 01 Jan 2026 22:55:34 +0000https://jeremyxtmeng.github.io/portfolio/tariff_3/<p>In this paper, I study whether tariffs can stimulate the domestic economy by raising demand for domestic goods. The project examines a central policy question in international macroeconomics: can protectionist trade policy increase output and employment, or do higher prices and distortions outweigh any expansionary effects? Open access <a href="https://jeremyxtmeng.github.io/jm/files/tariff_Meng.pdf">here</a>.</p> <ul> <li>Built a structural macroeconomic model to study how tariffs affect domestic prices, import demand, production, and welfare.</li> <li>Modeled the pricing decisions of producers and retailers to examine how tariff costs pass through from imported inputs and final goods to consumer prices.</li> <li>Compared the potential stimulus effect from import substitution with the negative effects of higher prices, reduced purchasing power, and lower consumer welfare.</li> <li>Studied how tariff pass-through depends on market structure, supply chain exposure, and the ability of firms to absorb or transmit cost increases.</li> <li>Used model-based counterfactuals to evaluate whether tariffs can generate aggregate demand effects similar to fiscal stimulus.</li> <li>Showed that tariffs may shift spending toward domestic producers in some settings, but they also create price distortions and welfare losses that limit their effectiveness as a stimulus tool.</li> </ul>