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UID:69e2979dea2ae59e4594a183d354df7c
CATEGORIES:Seminars
CREATED:20190405T175346
SUMMARY:David Weinstein - Columbia University
DESCRIPTION;ENCODING=QUOTED-PRINTABLE:<p><strong><span style="font-size: 11pt; font-family: Calibri, sans-serif; 
 color: black; background: white;">The Cost of the US-China Trade War: A Sto
 ck Market Approach </span></strong><span style="font-size: 11pt; font-famil
 y: Calibri, sans-serif;">joint with Mary Amiti, and Sang Hoon Kong</span></
 p><p style="text-align: justify;"><span style="font-size: 11pt; font-family
 : Calibri, sans-serif;">Abstract: </span></p><p style="text-align: justify;
 "><span style="font-size: 11pt; font-family: Calibri, sans-serif;">The welf
 are impact of protection in standard models is composed of a terms-of-trade
  effect, an efficiency effect, and a profit effect. Existing studies of the
  US-China trade war have imposed a zero-profit constraint on the data and h
 ave typically found the impact of protection to have small effects relative
  to national income. We relax this constraint by allowing for the possibili
 ty that the trade war reduces the return on investments in firm-specific ca
 pital. We show that one can use this approach to exactly decompose aggregat
 e stock market returns on days when protection is announced into a macro co
 mponent and trade component. We estimate that the US tariffs and Chinese re
 taliation reduced the present discounted value of firm profits by 576 billi
 on dollars or 1.9 percent of the total US market capitalization. These resu
 lts suggest that ignoring the impact of trade on firm profits misses an imp
 ortant channel through which trade affects incomes. </span></p>
DTSTAMP:20260404T124317Z
DTSTART:20191107T163000Z
DTEND:20191107T180000Z
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