Self-enforcing trade policy and exchange rate adjustment

• 成果类型: Article
• 署名作者: Auray, Stephane; Devereux, Michael B.; Eyquem, Aurelien
• 署名单位: Ecole Nationale de la Statistique et de l'Analyse de l'Information (ENSAI); University of British Columbia; Centre for Economic Policy Research - UK; National Bureau of Economic Research; Universite Lyon 2; Centre National de la Recherche Scientifique (CNRS); CNRS - Institute for Humanities & Social Sciences (INSHS); Institut Universitaire de France
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2021.103552
• 发表日期: 2022
• 关键词: Exchange rates; Protectionism; business cycle; Exchange rate regime

摘要

We explore the cyclical pattern of trade protection in a simple New Keynesian open economy macro model. Tariff rates are determined endogenously in a sustainable equilibrium of a two country trade policy game. The incentive to levy tariffs is greater when the exchange rate is floating, since a fixed exchange rate removes the ability to manipulate the terms of trade. If price are fully flexible, we find that protectionism is basically a-cyclical. By contrast, with pre-set prices, tariffs respond to both monetary and productivity shocks. But the degree of pro-tection may be pro-cyclical or counter-cyclical, depending on the pattern of shocks and param-eter values.(c) 2021 Elsevier B.V. All rights reserved.