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Trade Wars: Nobody Expects the Spanish Inquisition

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  • Francois, Joseph
  • Bekkers, Eddy
  • Nelson, Doug R
  • Rojas-Romagosa, Hugo

Abstract

This paper assesses the utility of economic theory of rational trade wars to predict such events or to prescribe courses of action to control their consequences. Trade wars are fundamentally political events whose causes are almost completely political and whose consequences are to a significant degree also political. Contemporary economic theory has developed during a uniquely peaceful and liberal period in world history, affecting how economists have thought about trade conflicts, leaving the profession unprepared to provide serious analysis or advice.

Suggested Citation

  • Francois, Joseph & Bekkers, Eddy & Nelson, Doug R & Rojas-Romagosa, Hugo, 2019. "Trade Wars: Nobody Expects the Spanish Inquisition," CEPR Discussion Papers 14079, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:14079
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    More about this item

    Keywords

    Trade wars; International political economy; Optimal taxation; General equilibrium trade models;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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