Tariff wars, unemployment, and top incomes

• 成果类型: Article
• 署名作者: Dinopoulos, Elias; Heins, Gunnar; Unel, Bulent
• 署名单位: State University System of Florida; University of Florida; Louisiana State University System; Louisiana State University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2024.103616
• 发表日期: 2024
• 关键词: Tariff wars; Optimal tariffs; Nash tariffs; occupational choice; entrepreneurs; Top incomes; directed search; unemployment; welfare

摘要

Motivated by the 2018-19 global tariff war, we develop a multi-country trade model with occupational choice, heterogeneous firms, and unemployment. The model features a complete tariff pass-through and positive optimal tariffs addressing product and labor-market distortions. The quantitative analysis of the model with four countries/regions shows that raising tariffs unilaterally by a country increases welfare but also raises unemployment and top incomes that country, whereas having the opposite impact on tariff-targeted countries. A global tariff reduces every country's welfare, unemployment, and top-income inequality, whereas moving from a worldwide tariff war to free trade raises every country's welfare, unemployment, top-income inequality.