IDEAS home Printed from https://ideas.repec.org/p/old/dpaper/415.html
   My bibliography  Save this paper

Quantifying Disruptive Trade Policies

Author

Listed:
  • Christoph Boehringer

    () (University of Oldenburg, Department of Economics)

  • Edward Balistreri

    () (Iowa State University)

  • Thomas Rutherford

    () (University of Wisconsin)

Abstract

Mainstream economic wisdom favoring cooperative free trade is challenged by a wave of disruptive trade policies. In this paper, we provide quantitative evidence concerning the economic impacts of tariffs implemented by the United States in 2018 and the subsequent retaliations by partner countries. Our analysis builds on a multi-region multi-sector general-equilibrium simulation model of the global economy that includes an innovative monopolistic-competition structure of bilateral representative firms.

Suggested Citation

  • Christoph Boehringer & Edward Balistreri & Thomas Rutherford, 2018. "Quantifying Disruptive Trade Policies," Working Papers V-415-18, University of Oldenburg, Department of Economics, revised Nov 2018.
  • Handle: RePEc:old:dpaper:415
    as

    Download full text from publisher

    File URL: http://www.uni-oldenburg.de/fileadmin/user_upload/wire/fachgebiete/vwl/V-415-18.pdf
    File Function: First version, 2018
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bruno Lanz & Thomas F Rutherford, 2016. "GTAPinGAMS: Multiregional and Small Open Economy Models," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 1(2), pages 1-77, December.
    2. Robert W. Staiger & Kyle Bagwell, 1999. "An Economic Theory of GATT," American Economic Review, American Economic Association, vol. 89(1), pages 215-248, March.
    3. Balistreri, Edward J. & Hillberry, Russell H. & Rutherford, Thomas F., 2011. "Structural estimation and solution of international trade models with heterogeneous firms," Journal of International Economics, Elsevier, vol. 83(2), pages 95-108, March.
    4. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, September.
    5. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    6. Balistreri, Edward J. & Rutherford, Thomas F., 2012. "Subglobal carbon policy and the competitive selection of heterogeneous firms," Energy Economics, Elsevier, vol. 34(S2), pages 190-197.
    7. Jaime de MELO & Sherman ROBINSON, 2015. "Product Differentiation And The Treatment Of Foreign Trade In Computable General Equilibrium Models Of Small Economies," World Scientific Book Chapters, in: Modeling Developing Countries' Policies in General Equilibrium, chapter 2, pages 21-41, World Scientific Publishing Co. Pte. Ltd..
    8. Rutherford, Thomas F., 1995. "Extension of GAMS for complementarity problems arising in applied economic analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 19(8), pages 1299-1324, November.
    9. Whaples, Robert, 1995. "Where Is There Consensus Among American Economic Historians? The Results of a Survey on Forty Propositions," The Journal of Economic History, Cambridge University Press, vol. 55(1), pages 139-154, March.
    10. Edward J. Balistreri & Christoph Böhringer & Thomas F. Rutherford, 2018. "Carbon policy and the structure of global trade," The World Economy, Wiley Blackwell, vol. 41(1), pages 194-221, January.
    11. Balistreri, Edward J. & Rutherford, Thomas F., 2013. "Computing General Equilibrium Theories of Monopolistic Competition and Heterogeneous Firms," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1513-1570, Elsevier.
    12. Rutherford, Thomas F, 1999. "Applied General Equilibrium Modeling with MPSGE as a GAMS Subsystem: An Overview of the Modeling Framework and Syntax," Computational Economics, Springer;Society for Computational Economics, vol. 14(1-2), pages 1-46, October.
    13. Thomas F. Rutherford & David G. Tarr, 2014. "Poverty effects of Russia's WTO accession: Modeling “real” households with endogenous productivity effects," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 12, pages 287-306, World Scientific Publishing Co. Pte. Ltd..
    14. Jesper Jensen & David Tarr, 2014. "Trade, Exchange Rate, and Energy Pricing Reform in Iran: Potentially Large Efficiency Effects and Gains to the Poor," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 13, pages 307-326, World Scientific Publishing Co. Pte. Ltd..
    15. Balistreri, Edward J. & Markusen, James R., 2009. "Sub-national differentiation and the role of the firm in optimal international pricing," Economic Modelling, Elsevier, vol. 26(1), pages 47-62, January.
    16. Thomas F. Rutherford & David G. Tarr, 2017. "Trade liberalization, product variety and growth in a small open economy: a quantitative assessment," World Scientific Book Chapters, in: Trade Policies for Development and Transition, chapter 17, pages 389-414, World Scientific Publishing Co. Pte. Ltd..
    17. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lee, Meongsu & Westhoff, Patrick, 2020. "The U.S.-China Trade war and Impact on Land Returning to Soybean Production from the Conservation Reserve Program," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304518, Agricultural and Applied Economics Association.
    2. Rita Cappariello & Sebastian Franco-Bedoya & Vanessa Gunnella & Gianmarco Ottaviano, 2020. "Rising protectionism and global value chains: quantifying the general equilibrium effects," CEP Discussion Papers dp1682, Centre for Economic Performance, LSE.
    3. Cecilia Bellora & Lionel Fontagné, 2019. "Shooting Oneself in the Foot? Trade War and Global Value Chains," Working Papers 2019-18, CEPII research center.
    4. Robinson, Sherman & Thierfelder, Karen, 2019. "Global adjustment to US disengagement from the world trading system," Journal of Policy Modeling, Elsevier, vol. 41(3), pages 522-536.
    5. James A. Giesecke & Nhi H. Tran & Robert Waschik, 2021. "Should Australia be concerned by Beijing’s trade threats: modelling the economic costs of a restriction on imports of Australian coal," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(1), pages 1-22, January.
    6. Bekkers, Eddy & Schroeter, Sofia, 2020. "An economic analysis of the US-China trade conflict," WTO Staff Working Papers ERSD-2020-04, World Trade Organization (WTO), Economic Research and Statistics Division.
    7. 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.
    8. Cecilia Bellora & Lionel Fontagné, 2019. "Shooting Oneself in the Foot? Trade War and Global Value Chains," Working Papers 2019-18, CEPII research center.
    9. Meinen, Philipp & Schulte, Patrick & Cigna, Simone & Steinhoff, Nils, 2019. "The impact of US tariffs against China on US imports: Evidence for trade diversion?," Discussion Papers 46/2019, Deutsche Bundesbank.
    10. Haiou Mao & Holger Görg, 2020. "Friends like this: The impact of the US–China trade war on global value chains," The World Economy, Wiley Blackwell, vol. 43(7), pages 1776-1791, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tarr, David G., 2013. "Putting Services and Foreign Direct Investment with Endogenous Productivity Effects in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 303-377, Elsevier.
    2. Hübler, Michael & Pothen, Frank, 2017. "Trade-induced productivity gains reduce incentives to impose strategic tariffs," Economic Modelling, Elsevier, vol. 61(C), pages 420-431.
    3. Zoryana Olekseyuk & Edward J. Balistreri, 2018. "Trade liberalization gains under different trade theories: a case study for Ukraine," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(3), pages 507-542, August.
    4. Minghao Li & Edward J. Balistreri & Wendong Zhang, 2018. "The 2018 Trade War: Data and Nascent General Equilibrium Analysis," Center for Agricultural and Rural Development (CARD) Publications 18-wp587, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    5. Balistreri, Edward J. & Tarr, David G., 2020. "Comparison of deep integration in the Melitz, Krugman and Armington models: The case of The Philippines in RCEP," Economic Modelling, Elsevier, vol. 85(C), pages 255-271.
    6. Kym Anderson & Anna Strutt, 2014. "Emerging economies, productivity growth and trade with resource-rich economies by 2030," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(4), pages 590-606, October.
    7. Rod Tyers, 2015. "Service Oligopolies and Australia's Economy-Wide Performance," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 48(4), pages 333-356, December.
    8. Costinot, Arnaud & Rodríguez-Clare, Andrés, 2014. "Trade Theory with Numbers: Quantifying the Consequences of Globalization," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 197-261, Elsevier.
    9. Tyers, Rod, 2014. "Looking inward for transformative growth," China Economic Review, Elsevier, vol. 29(C), pages 166-184.
    10. Hübler, Michael & Pothen, Frank, 2013. "The optimal tariff in the presence of trade-induced productivity gains," ZEW Discussion Papers 13-103, ZEW - Leibniz Centre for European Economic Research.
    11. Hosoe, Nobuhiro, 2018. "Impact of border barriers, returning migrants, and trade diversion in Brexit: Firm exit and loss of variety," Economic Modelling, Elsevier, vol. 69(C), pages 193-204.
    12. Balistreri, Edward J. & Hillberry, Russell H. & Rutherford, Thomas F., 2011. "Structural estimation and solution of international trade models with heterogeneous firms," Journal of International Economics, Elsevier, vol. 83(2), pages 95-108, March.
    13. Akihito Asano & Rod Tyers, 2016. "Japan's oligopolies: potential gains from third arrow reforms," CAMA Working Papers 2016-03, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    14. Kazuhiko Oyamada & Kaoru Nabeshima & Etsuyo Michida, 2015. "Analyses of EU RoHS/ELV Directives Based on an AGE Model with Melitz-type Trade Specification," EcoMod2015 8304, EcoMod.
    15. Zoryana Olekseyuk, 2015. "The EU-Ukraine Deep and Comprehensive Free Trade Agreement and the importance of FDI," EcoMod2015 8391, EcoMod.
    16. Oyamada, Kazuhiko, 2016. "Simulation analysis of the EU ELV/RoHS directives based on an applied general equilibrium model with Melitz-type trade specification," IDE Discussion Papers 587, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    17. Li, Minghao & Balistreri, Edward J. & Zhang, Wendong, 2020. "The U.S.–China trade war: Tariff data and general equilibrium analysis," Journal of Asian Economics, Elsevier, vol. 69(C).
    18. Minghao Li & Edward J. Balistreri & Wendong Zhang, 2018. "The 2018 Trade War: Data and Nascent General Equilibrium Analysis," Center for Agricultural and Rural Development (CARD) Publications 18-wp587, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    19. Balistreri, Edward J. & Rutherford, Thomas F., 2013. "Computing General Equilibrium Theories of Monopolistic Competition and Heterogeneous Firms," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1513-1570, Elsevier.
    20. Zoryana Olekseyuk, 2016. "Modeling of FDI in business services: Additional effects in case of Ukraine's European integration," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(7), pages 1010-1043, October.

    More about this item

    Keywords

    Applied econimic analysis; Multi-region models; Trade policy; Monopolistic competition; Trade wars;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:old:dpaper:415. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Catharina Schramm). General contact details of provider: http://edirc.repec.org/data/fwoldde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.