IDEAS home Printed from https://ideas.repec.org/p/wti/papers/1234.html
   My bibliography  Save this paper

Trade Wars: Nobody Expects the Spanish Inquisition

Author

Listed:
  • Bekkers, Eddy
  • Francois, Joseph
  • 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

  • Bekkers, Eddy & Francois, Joseph & Rojas-Romagosa, Hugo, 2019. "Trade Wars: Nobody Expects the Spanish Inquisition," Papers 1234, World Trade Institute.
  • Handle: RePEc:wti:papers:1234
    as

    Download full text from publisher

    File URL: http://www.wti.org/media/filer_public/5f/f4/5ff4e11b-fe3a-4cf8-be6e-e687b0c08101/wti_wp_03_2019_trade_wars_nobody_expects_the_spanish_inquisition.pdf
    File Function: First version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ronald Findlay & Kevin H. O'Rourke, 2007. "Power and Plenty: Trade, War and the World Economy in the Second Millennium (Preface)," Trinity Economics Papers tep0107, Trinity College Dublin, Department of Economics.
    2. Debreu, Gerard, 1970. "Economies with a Finite Set of Equilibria," Econometrica, Econometric Society, vol. 38(3), pages 387-392, May.
    3. Philip T. Hoffman, 2015. "Why Did Europe Conquer the World?," Economics Books, Princeton University Press, edition 1, number 10452.
    4. Lee, Hiro & Roland-Holst, David, 1999. "Cooperation or Confrontation in U.S.-Japan Trade? Some General Equilibrium Estimates," Journal of the Japanese and International Economies, Elsevier, vol. 13(2), pages 119-139, June.
    5. Bekkers, Eddy, 2019. "Challenges to the trade system: The potential impact of changes in future trade policy," Journal of Policy Modeling, Elsevier, vol. 41(3), pages 489-506.
    6. Harry G. Johnson, 1953. "Optimum Tariffs and Retaliation," Review of Economic Studies, Oxford University Press, vol. 21(2), pages 142-153.
    7. Kuga, Kiyoshi, 1973. "Tariff retaliation and policy equilibrium," Journal of International Economics, Elsevier, vol. 3(4), pages 351-366, November.
    8. He, Chuantian & Li, Chunding & Wang, Jing & Whalley, John, 2017. "The Armington assumption and the size of optimal tariffs," Economic Modelling, Elsevier, vol. 66(C), pages 214-222.
    9. Mayer, Wolfgang, 1981. "Theoretical Considerations on Negotiated Tariff Adjustments," Oxford Economic Papers, Oxford University Press, vol. 33(1), pages 135-153, March.
    10. Antoine Bouët & David Laborde, 2018. "US trade wars in the twenty‐first century with emerging countries: Make America and its partners lose again," The World Economy, Wiley Blackwell, vol. 41(9), pages 2276-2319, September.
    11. Carlos, Ann M., 2003. "The Rise of Commercial Empires: England and the Netherlands in the Age of Mercantilism, 1650–1770. By David Ormond. Cambridge: Cambridge University Press, 2003. Pp. ix, 388. $75.00," The Journal of Economic History, Cambridge University Press, vol. 63(4), pages 1154-1155, December.
    12. Markusen, James R & Wigle, Randall M, 1989. "Nash Equilibrium Tariffs for the United States and Canada: The Roles of Country Size, Scale Economies, and Capital Mobility," Journal of Political Economy, University of Chicago Press, vol. 97(2), pages 368-386, April.
    13. Nelson, Douglas, 1989. "Domestic Political Preconditions of US Trade Policy: Liberal Structure and Protectionist Dynamics," Journal of Public Policy, Cambridge University Press, vol. 9(1), pages 83-108, January.
    14. Devarajan,Shantayanan & Go,Delfin Sia & Lakatos,Csilla & Robinson,Sherman & Thierfelder,Karen E., 2018. "Traders'Dilemma : Developing Countries'Response to Trade Disputes," Policy Research Working Paper Series 8640, The World Bank.
    15. Bekkers, Eddy & Teh, Robert, 2019. "Potential economic effects of a global trade conflict: Projecting the medium-run effects with the WTO global trade model," WTO Staff Working Papers ERSD-2019-04, World Trade Organization (WTO), Economic Research and Statistics Division.
    16. Carlo Perroni & John Whalley, 2000. "The new regionalism: trade liberalization or insurance?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 33(1), pages 1-24, February.
    17. Gabriel Felbermayr & Marina Steininger & Erdal Yalcin, 2017. "Quantifying Trump: The Costs of a Protectionist US," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 18(04), pages 28-36, December.
    18. Eichengreen, Barry, 1996. "Golden Fetters: The Gold Standard and the Great Depression, 1919-1939," OUP Catalogue, Oxford University Press, number 9780195101133.
    19. Hamilton, Bob & Whalley, John, 1983. "Optimal tariff calculations in alternative trade models and some possible implications for current world trading arrangements," Journal of International Economics, Elsevier, vol. 15(3-4), pages 323-348, November.
    20. Rodriguez, Carlos Alfredo, 1974. "The non-equivalence of tariffs and quotas under retaliation," Journal of International Economics, Elsevier, vol. 4(3), pages 295-298, August.
    21. Ronald Findlay & Kevin H. O'Rourke, 2007. "Introduction to Power and Plenty: Trade, War, and the World Economy in the Second Millennium," Introductory Chapters, in: Power and Plenty: Trade, War, and the World Economy in the Second Millennium, Princeton University Press.
    22. Adam Brandenburger, 2014. "The Language of Game Theory:Putting Epistemics into the Mathematics of Games," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 8844, November.
    23. Ronald Findlay & Kevin H. O'Rourke, 2007. "Preface to Power and Plenty: Trade, War, and the World Economy in the Second Millennium," Introductory Chapters, in: Power and Plenty: Trade, War, and the World Economy in the Second Millennium, Princeton University Press.
    24. Falvey, Rodney E., 1985. "Quotas and retaliation : A re-examination," Economics Letters, Elsevier, vol. 17(4), pages 373-377.
    Full references (including those not matched with items on IDEAS)

    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. He, Chuantian & Li, Chunding & Wang, Jing & Whalley, John, 2017. "The Armington assumption and the size of optimal tariffs," Economic Modelling, Elsevier, vol. 66(C), pages 214-222.
    2. Chunding Li & John Whalley & Chuantian He & Chuangwei Lin, 2021. "The 2008 Financial Crisis and the Lack of Retaliatory Trade Intervention," CESifo Economic Studies, CESifo, vol. 67(1), pages 78-105.
    3. Alejandro Ayuso‐Díaz & Antonio Tena‐Junguito, 2020. "Trade in the shadow of power: Japanese industrial exports in the interwar years," Economic History Review, Economic History Society, vol. 73(3), pages 815-843, August.
    4. Miguel Almunia & Agustín Bénétrix & Barry Eichengreen & Kevin H. O’Rourke & Gisela Rua, 2010. "From Great Depression to Great Credit Crisis: similarities, differences and lessons [Germany: Guns, butter, and economic miracles]," Economic Policy, CEPR;CES;MSH, vol. 25(62), pages 219-265.
    5. Nicholas Crafts & Peter Fearon, 2010. "Lessons from the 1930s Great Depression," Oxford Review of Economic Policy, Oxford University Press, vol. 26(3), pages 285-317, Autumn.
    6. Ralph Ossa, 2011. "A "New Trade" Theory of GATT/WTO Negotiations," Journal of Political Economy, University of Chicago Press, vol. 119(1), pages 122-152.
    7. Douglas A. Irwin & Kevin H. O'Rourke, 2013. "Coping with Shocks and Shifts: The Multilateral Trading System in Historical Perspective," NBER Chapters, in: Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century, pages 11-37, National Bureau of Economic Research, Inc.
    8. Kevin Hjortshøj O’Rourke, 2018. "Two Great Trade Collapses: The Interwar Period and Great Recession Compared," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 66(3), pages 418-439, September.
    9. Philip T. Hoffman, 2020. "The Great Divergence: Why Britain Industrialised First," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 60(2), pages 126-147, July.
    10. Matthias Morys & Guillaume Daudin & Kevin H. O'Rourke, 2008. "Globalization, 1870-1914," Economics Series Working Papers 395, University of Oxford, Department of Economics.
    11. Douglas A. Irwin & Kevin H. O'Rourke, 2013. "Coping with Shocks and Shifts: The Multilateral Trading System in Historical Perspective," NBER Chapters,in: Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century, pages 11-37 National Bureau of Economic Research, Inc.
    12. Ralph Ossa, 2016. "Quantitative Models of Commercial Policy," NBER Working Papers 22062, National Bureau of Economic Research, Inc.
    13. O'Rourke, Kevin Hjortsh�j, 2017. "Two Great Trade Collapses: The Interwar Period & Great Recession Compared," CEPR Discussion Papers 12286, C.E.P.R. Discussion Papers.
    14. Peter A.G. van Bergeijk, 2019. "Deglobalization 2.0," Books, Edward Elgar Publishing, number 18560.
    15. Kozlova, Olesia & de Jesus Noguera, Jose, 2018. "Achievers or slackers? Per capita income trends in European countries," Journal of Policy Modeling, Elsevier, vol. 40(6), pages 1332-1345.
    16. Michele Fratianni & Francesco Marchionne, 2011. "The Limits to Integration," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume I, chapter 9, Edward Elgar Publishing.
    17. Ferreira, Pedro Cavalcanti & Pessôa, Samuel & dos Santos, Marcelo Rodrigues, 2016. "Globalization And The Industrial Revolution," Macroeconomic Dynamics, Cambridge University Press, vol. 20(3), pages 643-666, April.
    18. Roger R. Betancourt, 2013. "Should the U.S. Lift the Cuban Embargo? Yes; It Already Has; and It Depends!," Annual Proceedings, The Association for the Study of the Cuban Economy, vol. 23.
    19. Maurice Obstfeld, 2021. "Globalization and nationalism: Retrospect and prospect," Contemporary Economic Policy, Western Economic Association International, vol. 39(4), pages 675-690, October.
    20. Kenneth S. Chan & Jean-Pierre Laffargue, 2014. "The Growth and Decline of the Modern Sector and the Merchant Class in Imperial China," Review of Development Economics, Wiley Blackwell, vol. 18(1), pages 13-28, February.

    More about this item

    JEL classification:

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

    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:wti:papers:1234. 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: . General contact details of provider: https://edirc.repec.org/data/wtibech.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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Morven McLean (email available below). General contact details of provider: https://edirc.repec.org/data/wtibech.html .

    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.