[1/N] IMHO research may be lagging behind actual policy developments on this front.
Until now, most research has shown that disrupting the global supply chain is very costly for aggregate TFP.
We recently posted a paper on this topic:
https://twitter.com/ALashkaripour/status/1257333370209677312?s=20 https://twitter.com/DyanneVaught/status/1281457720793739264
Until now, most research has shown that disrupting the global supply chain is very costly for aggregate TFP.
We recently posted a paper on this topic:
https://twitter.com/ALashkaripour/status/1257333370209677312?s=20 https://twitter.com/DyanneVaught/status/1281457720793739264
[2/N] There are also two great papers by @ChadBown on protection along supply chains:
- Global Supply Chains and Trade Policy [Link: https://www.nber.org/papers/w21883
- Trade Protection along Supply Chains [Link: https://www.freit.org/ETOS/papers/conconi.pdf]
- Global Supply Chains and Trade Policy [Link: https://www.nber.org/papers/w21883
- Trade Protection along Supply Chains [Link: https://www.freit.org/ETOS/papers/conconi.pdf]
[3/N] The message this body of research is implicitly trying to convey is that "trade protection is an inefficient tool for restoring wage equality."
Progressive income taxes are a much better remedy for inequality...
Progressive income taxes are a much better remedy for inequality...
[4/N] ...a point that has been articulated very nicely by these papers:
- Inequality, Redistribution and Optimal Trade Policy [Link: http://www.shourideh.com/uploads/3/6/8/3/3683044/draft6.pdf
- Redistributing the gains from trade through progressive Taxation [by @tradewartracker; Link: https://www.sciencedirect.com/science/article/pii/S0022199618303672?casa_token=oQPq3K6q3NkAAAAA:eqDCpvt3mYvavfh7Xx0A9zv4JcB-coBKNo8K-LyBimL5Ad3befmjateEoCog-IUM4LjzhtPdBa8]
- Inequality, Redistribution and Optimal Trade Policy [Link: http://www.shourideh.com/uploads/3/6/8/3/3683044/draft6.pdf
- Redistributing the gains from trade through progressive Taxation [by @tradewartracker; Link: https://www.sciencedirect.com/science/article/pii/S0022199618303672?casa_token=oQPq3K6q3NkAAAAA:eqDCpvt3mYvavfh7Xx0A9zv4JcB-coBKNo8K-LyBimL5Ad3befmjateEoCog-IUM4LjzhtPdBa8]
[5/N] Unfortunately, this basic message has not gained much traction among policy-makers.
Instead, over the past few years, it‘s become a bipartisan objective to restore wage equality with protectionist policies.
Instead, over the past few years, it‘s become a bipartisan objective to restore wage equality with protectionist policies.
[6/N] In this political climate, it may be useful to temporarily shift research focus in a new direction. I’m sure many trade economists are doing this already and we’ll see the output soon.
For instance, We don’t know if existing US tariffs are even progressive...
For instance, We don’t know if existing US tariffs are even progressive...
[7/7] Can the US tariff schedule be reformed in a way that maintains aggregate TFP but lowers wage inequality?
I’m not sure if we have a clear answer to this question or other similar questions.
I’m not sure if we have a clear answer to this question or other similar questions.