Trade Wars: Nobody Expects the Spanish Inquisition
21 Pages Posted: 6 Nov 2019
There are 2 versions of this paper
Trade Wars: Nobody Expects the Spanish Inquisition
Date Written: October 2019
Abstract
This paper assesses the utility of economic theory of rational trade wars to predict such events or to prescribe courses of action to control their consequences. Trade wars are fundamentally political events whose causes are almost completely political and whose consequences are to a significant degree also political. Contemporary economic theory has developed during a uniquely peaceful and liberal period in world history, affecting how economists have thought about trade conflicts, leaving the profession unprepared to provide serious analysis or advice.
Keywords: general equilibrium trade models, International Political Economy, optimal taxation, trade wars
JEL Classification: F13, F14
Suggested Citation: Suggested Citation