Uncertainty and Trade Agreements

• 成果类型: Article
• 署名作者: Limao, Nuno; Maggi, Giovanni
• 署名单位: University System of Maryland; University of Maryland College Park; National Bureau of Economic Research; Yale University; Getulio Vargas Foundation
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20130163
• 发表日期: 2015
• 页码: 1-42
• 关键词: increasing risk; POLICY; volatility; MARKETS; TARIFFS; CHOICE; terms; size

摘要

We explore conditions under which trade agreements can provide gains by reducing trade policy uncertainty. Given the degree of income risk aversion, this is more likely when economies are more open, export supply elasticities are lower, and economies more specialized. Governments have stronger incentives to sign trade agreements when the trading environment is more uncertain. As exogenous trade costs decline, the gains from reducing tariff uncertainty become more important relative to reducing average tariff levels. We also develop a simple sufficient statistic approach to quantify the gains from managing trade policy uncertainty, and examine the impact of ex ante investments on such gains.