We study the demand for government participation in China's venture capital and private equity market. We conduct a large-scale, non-deceptive field experiment in collaboration with the leading industry service provider, through which we survey both sides of the market: the capital investors and...

We develop a dynamic extension of Dornbusch et al. (1977) with "rustiness": the home country has relatively higher unit costs tomorrow for goods it is not producing today. We solve for optimal tariff policy when there is a potential for a crisis: an increase in demand for goods produced abroad....

We estimate the impact of trade policy uncertainty (TPU) on CES import price indices, focusing on the implications of Britain's exit from the European Union (Brexit). Our analysis reveals that an increase in the probability of Brexit increases U.K. import price indices by raising the prices of...

We formalize the GATT/WTO principle of reciprocity in workhorse quantitative trade models, characterizing reciprocal tariff cuts that hold terms of trade fixed and investigating their labor-market impacts. We provide closed-form expressions mapping reciprocal tariff cuts to labor market...

The resurgence of subsidies and industrial policies has raised concerns about their potential inefficiency and alignment with multilateral principles. Critics warn that such policies may divert resources to less efficient firms and provoke retaliatory measures from other countries, leading to a...

We study how the Jones Act -- a 100-year-old U.S. regulation that constrains domestic waterborne shipping -- affects U.S. markets for crude oil and petroleum products. We collect data on U.S. Gulf Coast and East Coast fuel prices, movements, and consumption, and we estimate domestic non-Jones...

How should industrial policies be directed to reduce distortions and foster economic development? We study this question in a multi-sector model with technology adoption, where the production of goods and modern technologies features rich network structures. We provide simple formulas for the...

We examine the ways in which political realities shape industrial policy through the lens of modern political economy. We consider two broad "governance constraints": i) the political forces that shape how industrial policy is chosen and ii) the ways in which state capacity affects...

A relatively mild form of government failure - for example, bureaucrats can count but do not differentiate quality - can significantly affect the efficacy of industrial policy. We investigate this idea in the context of China's largest pro-innovation industrial policy using a structural model....

Are Chinese industrial policies making the targeted Chinese firms more productive? Alternatively, are efforts to promote productivity undercut by efforts to maintain or expand employment in less productive enterprises? In this paper, we attempt to shed light on these questions through the...