Auray, Stéphane; Devereux, Michael B.; Eyquem, Aurélien - National Bureau of Economic Research - 2023
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 … much higher tariffs, high inflation rates, and substantially larger welfare costs. We quantify the effects of a global …