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Article Dans Une Revue Journal of Money, Credit and Banking Année : 2023

The Demand for Trade Protection over the Business Cycle

Résumé

We build measures of the demand for trade protection, and relate them to permanent productivity and transitory monetary shocks identified from U.S. data. The demand for trade protection is countercyclical conditional on productivity shocks and procyclical conditional on monetary shocks. A two‐country dynamic stochastic general equilibrium (DSGE) model with trade in intermediate and final goods, sticky prices, and incomplete financial markets is proposed, in which tariffs are determined in a repeated noncooperative policy game. The resulting trade policies are consistent with the empirical evidence about the cyclical pattern of trade protection demand.

Dates et versions

hal-04611842 , version 1 (14-06-2024)

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Stéphane Auray, Michael Devereux, Aurélien Eyquem. The Demand for Trade Protection over the Business Cycle. Journal of Money, Credit and Banking, 2023, 56 (4), pp.865-898. ⟨10.1111/jmcb.13039⟩. ⟨hal-04611842⟩
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