Auray, Stéphane; Devereux, Michael B.; Eyquem, Aurélien - National Bureau of Economic Research - 2024
-cooperative trade policy can actually completely eliminate a trade war, and even act to partly offset the welfare cost of monopoly …Monetary rules may have a large effect on the outcome of trade wars if central banks target the CPI inflation rate or … prices where countries engage in trade wars. In the presence of monopoly pricing markups, we show that the final level of …