GTAP Resources: Resource Display
| GTAP Resource #5732 |
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"Trade Wars and Trade Disputes: The Role of Equity and Political Support" by Francois, Joseph, Douglas Nelson and Hugo Rojas-Romagosa Abstract The theoretical and quantitative analysis of trade wars is grounded in a relatively narrow treatment of optimal tariff theory and non-cooperative Nash equilibria. The lynchpin of this analytical framework is the assumption that trade policymakers are rational and have a simple well-established objective function to optimize. We argue that the preferred specification of this objective function ignores inequality at its peril. Working with a numerical model, we show that including equity (a primary focus of the earlier literature) as a determinant of social welfare can substantially change the noncooperative Nash outcome. In addition, when policy-makers do not meet the core assumption of rationality on trade policy, the economic outcomes of trade wars may also be very different from what estimates grounded in optimal tariff theory would suggest. |
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- Calibration and parameter estimation - Multilateral trade negotiations - Preferential trading arrangements - North America |
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If you have trouble accessing any of the attachments below due to disability, please contact the authors listed above.
Public Access  GTAP Resource 5732 (3.1 MB) Replicated: 0 time(s) GTAP Resource 5732 (3.1 MB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM
