Profits, Scale Economies, and the Gains from Trade and Industrial Policy

• 成果类型: Article
• 署名作者: Lashkaripour, Ahmad; Lugovskyy, Volodymyr
• 署名单位: Indiana University System; Indiana University Bloomington
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20210419
• 发表日期: 2023
• 页码: 2759-2808
• 关键词: Firm heterogeneity; welfare loss; Tariff wars; markups; LEVEL; differentiation; Retaliation; COMPETITION; symmetry; gravity

摘要

This paper examines the efficacy of second-best trade restrictions at correcting sectoral misallocation due to scale economies or prof-it-generating markups. To this end, we characterize optimal trade and industrial policies in an important class of quantitative trade models with scale effects and profits, estimating the structural parameters that govern policy outcomes. Our estimates reveal that standalone trade policy measures are remarkably ineffective at correcting mis-allocation, even when designed optimally. Unilateral adoption of corrective industrial policies is also ineffective due to immiserizing growth effects. But industrial policies coordinated internationally via a deep agreement are more transformative than any unilateral policy alternative. (JEL F12, F13,14. L52, O19, O25)