Self-Harming Trade Policy? Protectionism and Production Networks (A. Barattieri and M. Cacciatore)


Supervisor
Alessandro Barattieri - University of Montreal

Date and time
Wednesday, February 9, 2022 at 12:00 PM - In presenza + Zoom Webinar

Contact person
Emanuele Bracco

Publication date
December 22, 2021

Department
Economics  

Summary

Using monthly data on temporary trade barriers (TTBs), we estimate the dynamic employment effects of protectionism through vertical production linkages. First, exploiting high-frequency data and TTB procedural details, we identify trade policy shocks exogenous to economic fundamentals. We then use input-output tables to construct measures of protectionism affecting downstream producers. Finally, we estimate panel local projections using the identified trade-policy shocks. Protectionism has small and insignificant beneficial effects in protected industries. The effects in downstream industries are negative, sizable, and significant. The employment decline follows increase in intermediate-input and final goods prices, and a decline in stock market returns.

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