Protectionism and the business cycle*

• 成果类型: Article
• 署名作者: Barattieri, Alessandro; Cacciatore, Matteo; Ghironi, Fabio
• 署名单位: University of Quebec; University of Quebec Montreal; Bank of Canada; Universite de Montreal; HEC Montreal; University of Washington; University of Washington Seattle; National Bureau of Economic Research; Universite de Montreal; HEC Montreal; University of Washington; University of Washington Seattle
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2020.103417
• 发表日期: 2021
• 关键词: inflation; liquidity trap; Macroeconomic dynamics; Protectionism; TARIFFS

摘要

We study the macroeconomic effects of protectionism. First, using high-frequency trade policy data, we present fresh evidence on the dynamic effects of temporary trade barriers. Estimates from country-level and panel VARs show that protectionism acts as a supply shock, causing output to fall and inflation to rise in the short run. Moreover, protectionism has at best a small positive effect on the trade balance. Second, we build a small open economy model with firm heterogeneity, endogenous selection into trade, and nominal rigidity that successfully reproduces the VAR evidence. The model highlights the importance of aggregate investment dynamics and micro-level reallocations for the contractionary effects of tariffs. We then use the model to study scenarios where temporary trade barriers have been advocated as potentially beneficial, including recessions with binding constraints on monetary policy easing or in the presence of a fixed exchange rate. In all the scenarios we consider, protectionism is not an effective tool for macroeconomic stimulus. (c) 2020 Published by Elsevier B.V.