Researchers from Federal Reserve Bank Report Recent Findings in Investment (Import Tariffs and Illegal Immigration: a Strategic Analysis): Investment

2026 AUG 20 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Research findings on Investment are discussed in a new report. According to news reporting originating in St. Louis, Missouri, by NewsRx journalists, research stated, “We examine the effects of tariffs in a two-country specific-factors model with endogenous illegal immigration. While tariffs generate the usual terms-of-trade gains in goods markets for the host country, they also raise wages and attract additional illegal immigration.”

The news reporters obtained a quote from the research from Federal Reserve Bank, “Increased immigration-related costs and higher wage costs of hiring immigrants may reduce the welfare of citizens of the host country. We also show that within the context of our two-nation framework, free trade need not maximize joint welfare when illegal immigration and certain immigration-related costs are present. Finally, we analyze a sequential game in which the host nation announces a contingent tariff schedule to induce the source nation to adopt emigration-deterring border enforcement.”

According to the news reporters, the research concluded: “Under a credible commitment mechanism, the host nation can achieve a free-trade equilibrium with lower illegal immigration and higher welfare compared with the baseline equilibrium without contingent tariffs.”

This research has been peer-reviewed.

For more information on this research see: Import Tariffs and Illegal Immigration: a Strategic Analysis. Review, 2026;108(7):1-12. Review can be contacted at: Federal Reserve Bank St Louis, Box 442, St Louis, MO 63166, USA.

Our news correspondents report that additional information may be obtained by contacting Subhayu Bandyopadhyay, Federal Reserve Bank, St. Louis, MO 63102, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.20955/r.2026.07. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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