Lunch Seminar Economics (LSE) a.a. 2021-2022
Intervene: Alessandro Barattieri (ESG UQAM)
Title: Self-Harming Trade Policy? Protectionism and Production Networks
Authors: A. Barattieri, M.Cacciatore
Abstract: Using monthly data on temporary trade barriers (TTBs), we estimate the dynamic employment effects of protectionism through vertical production linkages. First, exploiting high-frequency data and TTB procedural details, we identify trade policy shocks exogenous to economic fundamentals. We then use input-output tables to construct measures of protectionism affecting downstream producers. Finally, we estimate panel local projections using the identified trade-policy shocks. Protectionism has small and insignificant beneficial effects in protected industries. The effects in downstream industries are negative, sizable, and significant. The employment decline follows an increase in intermediate-input and final goods prices, and a decline in stock market returns.