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Who Benefits from Trade Wars?

Author

Listed:
  • Wolfgang Lechthaler

    (Kiel Institute for the World Economy)

  • Mariya Mileva

    (California State University, Long Beach)

Abstract

Even though economists keep on emphasising the benefits of international trade, protectionism is on the rise in many industrialised countries. The authors argue that a potential explanation for this phenomenon can be found in the short-run distributional effects of import tariffs: while protectionism hurts the economy from an aggregate perspective (i.e. GDP goes down), unskilled workers in import-competing sectors benefit in the short run and do not lose in the long run. They might therefore lend political support to protectionism.

Suggested Citation

  • Wolfgang Lechthaler & Mariya Mileva, 2018. "Who Benefits from Trade Wars?," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 53(1), pages 22-26, January.
    • Handle: RePEc:spr:intere:v:53:y:2018:i:1:d:10.1007_s10272-018-0714-y
    DOI: 10.1007/s10272-018-0714-y
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    Cited by:

    1. Sascha Tobias Wengerek, 2020. "Share price reactions to tariff imposition announcements in the Trump era - An event study of the trade conflict," Working Papers Dissertations 59, Paderborn University, Faculty of Business Administration and Economics.

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