Global Macroeconomic Repercussions of US Trade Restrictions : Evidence from a GVAR Model

We employ a global vector autoregression (GVAR) model to analyze international spillover effects of US trade restrictions, modeled as a reduction of US imports. Our sample consists of the US and 25 countries in the rest of the world, grouped into larger regions comprising European nations, non-Europ...

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Main Authors:	Kempa, Bernd, Khan, Nazmus Sadat
Format:	Journal Article
Published:	Taylor and Francis 2019
Subjects:	TRADE RESTRICTIONS SPILLOVER GLOBAL VECTOR AUTOREGRESSION TRADE WAR
Online Access:	http://hdl.handle.net/10986/32771

id	okr-10986-32771
recordtype	oai_dc
spelling	okr-10986-327712021-05-25T10:54:37Z Global Macroeconomic Repercussions of US Trade Restrictions : Evidence from a GVAR Model Kempa, Bernd Khan, Nazmus Sadat TRADE RESTRICTIONS SPILLOVER GLOBAL VECTOR AUTOREGRESSION TRADE WAR We employ a global vector autoregression (GVAR) model to analyze international spillover effects of US trade restrictions, modeled as a reduction of US imports. Our sample consists of the US and 25 countries in the rest of the world, grouped into larger regions comprising European nations, non-European industrial countries and emerging economies. We find US trade restrictions to reduce trade volumes and income levels in the rest of the world as well as in the US. The trade balance deteriorates across all world regions except in the US, where it is unaffected by the trade restrictions. We also model the effects of a trade war in which the rest of the world responds in equal measure to the trade restrictions imposed by the US. We again find that export and import activity recedes both in the US and in the rest of the world, although the resulting effects are now strongest in the short run. The trade balance improves in the rest of the world but deteriorates in the US. In terms of the GDP response, the rest of the world is initially much harder hit by the imposition of the retaliatory trade measure than is the US. 2019-12-04T19:32:59Z 2019-12-04T19:32:59Z 2019-08-27 Journal Article International Economic Journal 1016-8737 http://hdl.handle.net/10986/32771 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Taylor and Francis Publications & Research :: Journal Article Publications & Research United States
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	TRADE RESTRICTIONS SPILLOVER GLOBAL VECTOR AUTOREGRESSION TRADE WAR
spellingShingle	TRADE RESTRICTIONS SPILLOVER GLOBAL VECTOR AUTOREGRESSION TRADE WAR Kempa, Bernd Khan, Nazmus Sadat Global Macroeconomic Repercussions of US Trade Restrictions : Evidence from a GVAR Model
geographic_facet	United States
description	We employ a global vector autoregression (GVAR) model to analyze international spillover effects of US trade restrictions, modeled as a reduction of US imports. Our sample consists of the US and 25 countries in the rest of the world, grouped into larger regions comprising European nations, non-European industrial countries and emerging economies. We find US trade restrictions to reduce trade volumes and income levels in the rest of the world as well as in the US. The trade balance deteriorates across all world regions except in the US, where it is unaffected by the trade restrictions. We also model the effects of a trade war in which the rest of the world responds in equal measure to the trade restrictions imposed by the US. We again find that export and import activity recedes both in the US and in the rest of the world, although the resulting effects are now strongest in the short run. The trade balance improves in the rest of the world but deteriorates in the US. In terms of the GDP response, the rest of the world is initially much harder hit by the imposition of the retaliatory trade measure than is the US.
format	Journal Article
author	Kempa, Bernd Khan, Nazmus Sadat
author_facet	Kempa, Bernd Khan, Nazmus Sadat
author_sort	Kempa, Bernd
title	Global Macroeconomic Repercussions of US Trade Restrictions : Evidence from a GVAR Model
title_short	Global Macroeconomic Repercussions of US Trade Restrictions : Evidence from a GVAR Model
title_full	Global Macroeconomic Repercussions of US Trade Restrictions : Evidence from a GVAR Model
title_fullStr	Global Macroeconomic Repercussions of US Trade Restrictions : Evidence from a GVAR Model
title_full_unstemmed	Global Macroeconomic Repercussions of US Trade Restrictions : Evidence from a GVAR Model
title_sort	global macroeconomic repercussions of us trade restrictions : evidence from a gvar model
publisher	Taylor and Francis
publishDate	2019
url	http://hdl.handle.net/10986/32771
_version_	1764477261721894912

Global Macroeconomic Repercussions of US Trade Restrictions : Evidence from a GVAR Model

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