Preprint
Caught in the Crossfire: How Trade Policy Uncertainty Impacts Global Trade
Trade policy uncertainty impacts firm's decisions to enter export markets and make new investments. I extend the trade policy uncertainty literature in a multi-country trade model to evaluate the uncertainty effect on global trade flows. The model introduces two sources of uncertainty; namely a policy change probability and tariff size uncertainty. Using these two sources of uncertainty, I argue that the trade policy uncertainty moderates global trade flows and increases domestic price level due to lack of certainty in price distributions. The framework can be generalized to other uncertainties in trade partners. Finally, the model calibration demonstrates that a moderation of trade flows during the recent trade war period, can be explained by trade policy uncertainty.
- Language
-
Englisch
- Classification
-
Wirtschaft
- Subject
-
trade policy uncertainty
trade flows
sectoral heterogeneity
- Event
-
Geistige Schöpfung
- (who)
-
Sanyal, Anirban
- Event
-
Veröffentlichung
- (who)
-
SSRN
- (where)
-
Rochester
- (when)
-
2023
- DOI
-
doi:10.2139/ssrn.4471238
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Preprint
Associated
- Sanyal, Anirban
- SSRN
Time of origin
- 2023
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