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Journal Article
Understanding the evolution of trade deficits: trade elasticities of industrialized countries
In this article, the authors present updated trade elasticities?measures of how much imports and exports change in response to income and price changes?for the U.S. and six other industrialized countries, collectively known as the Group of Seven. They find that the imports and exports of these countries are slightly more responsive to changes in a country?s total income over a period that ends in 2006, compared with a period that ends in 1994.
Working Paper
Emerging economies, trade policy, and macroeconomic shock
This paper estimates the impact of macroeconomic shocks on the trade policies of thirteen major emerging economies over 1989-2010; by 2010, these WTO member countries collectively accounted for 21 percent of world merchandise imports and 22 percent of world GDP. We examine determinants of carefully constructed, bilateral measures of new import protection imposed at the extensive margin. New import restrictions on products arise through the temporary trade barriers (TTBs) ? antidumping, safeguards, and countervailing duties ? that have become some of the most important time-varying trade ...
Journal Article
The U.S. trade deficit: made in China?
Rapid growth of the U.S. bilateral trade deficit with China has promoted a widespread view that the overall trade deficit is "made in China." The authors examine the probable consequences of increased protection directed toward U.S. imports from China. Their appraisal of recent and prospective U.S. trade policy focuses on textiles and apparel?sectors where the growth of imports from China has been prominent. They also consider the likely effects of yuan appreciation on the bilateral and overall trade deficits.
Working Paper
Antidumping policy under imperfect competition
As average tariff rates have fallen, countries have increasingly turned to GATT-sanctioned ``special protection'' - especially antidumping duties - to restrict imports when import volumes increase suddenly. In this paper, I analyze a model of dumping among imperfectly competitive firms that face stochastic demand. I show that an antidumping duty can improve an importing-country's welfare when it faces dumping caused by weak foreign demand. Interestingly, the antidumping duty does not completely stem the tide of dumped imports, but it improves welfare through shifting some of the dumping ...
Journal Article
Understanding the great trade collapse of 2008–09 and the subsequent trade recovery
This article documents the Great Trade Collapse of 2008?09, as well as the dramatic recovery in trade of 2009?10. The authors consider how three distinct policy actions ? fiscal stimulus, funding for trade finance and a commitment to refrain from increasing trade barriers ? might have affected both the collapse and recovery.
Working Paper
Import protection, business cycles, and exchange rates: evidence from the Great Recession
This paper uses highly detailed, quarterly data for five major industrialized economies to estimate the impact of> macroeconomic fluctuations on import protection policies over 1988:Q1?2010:Q4. First, estimates on a pre-Great Recession sample of data provide evidence of two key relationships. We confirm that appreciations in bilateral real exchange rates lead to substantial increases in antidumping and related forms of import protection: e.g., a 4 percent appreciation results in 60?90 percent more products being subject to import protection. We also provide evidence of a previously overlooked ...
Working Paper
Policy externalities: how U.S. antidumping affects Japanese exports to the EU
This paper investigates the international externalities associated with US use of antidumping (AD) measures by examining the relationship between US AD duties (ADDs) and Japanese exports to the US and EU over the 1992-2001 period. We first examine the trade destruction and trade diversion associated with Japanese exports to the US market resulting from US AD duties. We then investigate whether US ADDs impose externalities on a non- targeted third country by examining the effect of these US policies on Japanese exports to the EU. We document sizable trade deflection and trade depression in the ...
Working Paper
Cyclical dumping and U.S. antidumping protection: 1980-2001
In this paper, I test the theory that weak economic conditions in a foreign economy cause cyclical dumping, i.e., the temporary sale of products in a trading partner's economy at a price below average total cost. Although I am unable to observe prices or costs directly, a novel identification strategy allows me to uncover evidence of cyclical dumping. Using country- specific information on foreign economic shocks in manufacturing industries, filing decisions by the US industry, and antidumping decisions by the US government, I am able to identify strong evidence of cyclical dumping. After ...
Working Paper
Self-enforcing trade agreements: evidence from antidumping policy
This paper empirically examines how governments make trade policy adjustments under a self-enforcing trade agreement in the presence of economic shocks. Using data on US antidumping (AD) policy formation between 1997-2006, we find that US antidumping policy is often consistent with the time-varying ?cooperative? tariff increases modeled in the self-enforcing trade agreement of Bagwell and Staiger (1990). Estimates of an empirical model of US antidumping indicate that the likelihood of a US antidumping duty is increasing in the size of the unexpected import surge, decreasing in the volatility ...