Auray, Stéphane; Devereux, Michael B.; Eyquem, Aurélien - National Bureau of Economic Research - 2023
. The key message is that trade policy interacts with monetary policy in a way that magnifies the welfare costs of …This paper shows that the outcome of trade wars for tariffs and welfare will be affected by the monetary policy regime …, trade wars are relatively mild, with low equilibrium tariffs and small welfare costs. Discretionary monetary policies imply …