US EditionUnpredictable tariffs by the US implications for the euro area and its monetary policy
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Unpredictable tariffs by the US implications for the euro area and its monetary policy
Were the US to impose large and lasting tariffs on its imports from the EU, the effect on the euro area (EA) would be substantial and far-reaching. We expect the direct impact to be inflationary in the US and contractionary on EA aggregate demand and output. The indirect impact through an appreciation of the dollar (partly already occurred) tends to transfer inflation from the US to Europe. The ECB should be mindful that both deflationary and in…
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