The Role of Nationalism in the U.S. Macroeconomy

Abstract

Do instances of economic nationalism translate into consumer behavior concerning American import levels? Individual consumer biases and economic nationalism have been commonly researched in marketing and sociology, but have rarely been translated into a larger macroeconomic scale. In April 2017, President of the United States, Donald Trump, signed an executive order, “Buy American and Hire American.” In doing so, he called upon the “buy domestic” rhetoric that has been echoed through centuries of American politics. This paper will analyze the effects of this decision through a difference in differences model used in Mitchell Morey’s 2015 paper on home bias in trade. Results find that “Buy American and Hire American” caused imports to decrease for goods covered by the policy while causing overall imports to increase. This paper looks at the consumer implications of domestic content requirements, underscoring the repercussions of such politically attractive policies.