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Should we worry about impact of looming trade war? Cristian's JMP says "yes." He develops polit. econ. model: Predicts selection of goods subj. to tariffs during trade wars. Using its predictions, he estimates trade elasticities, finds high welfare costs. cristianespinosa.com

A well-timed JMP on a political economy model of tariffs, coupled with estimation of trade elasticities using granular data on US-Canada "trade war". Cristian argues that welfare effects of tariffs might be larger than implied by the current literature 👇

My student Cristian is on the market this year w. super interesting and topical paper on trade wars & welfare costs of trade impediments. Punchline: Discretionary tariffs are targeted, this needs to be accounted for when estimating trade elasticities => higher welfare costs.

Yesterday I presented my JMP at the CRC Seminar series at Department of Economics, University of Mannheim . It was an amazing experience and I received valuable feedback from the faculty!! Thank you 🙏 🙏

At XXVI Workshop in Vigo, Spain in July, Cristian Cristian Espinosa gave great presentation of this paper. He argues there are large selection biases in estimation of trade elasticities of goods targeted in trade wars. Controlling for biases, he finds trade wars have much higher costs.

Quite relevant to this discussion is the work by Cristian Espinosa which I discuss here a bit in context of work with Carlo Schwarz in 2018/2019. In this context specifically I raise the possibility of this accelerating dedollarisation x.com/fetzert/status…