Unequal gains, prolonged pain: A model of protectionist overshooting and escalation

Blanchard E, Willmann G (2022)
Journal of International Economics 135: 103559.

Zeitschriftenaufsatz | Veröffentlicht | Englisch
 
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Autor*in
Blanchard, Emily; Willmann, GeraldUniBi
Abstract / Bemerkung
We develop a model of democratic responses to macroeconomic shocks, and show that when economic adjustment is slower than potential political change, economic shocks can trigger populist surges. Applied to trade policy, we show that unexpected changes in world prices or skill biased technological change can induce a surge in economic nationalism and trade protection. Over time, the initial protectionist surge will gradually diminish if and only if educational gains enable less-skilled workers to catch up with the overall economy. The more unequal the initial distribution of the returns to human capital, the greater and longer-lasting the protectionist backlash will be: unequal gains, prolonged pain. Key data markers suggested by the model exhibit patterns consistent with recent surges in protectionism in the US and UK.(c) 2021 Elsevier B.V. All rights reserved.
Stichworte
Populism; Protectionism; Overshooting; Dynamic political economy; Human; capital; Education; Overlapping generations; Endogenous tariffs
Erscheinungsjahr
2022
Zeitschriftentitel
Journal of International Economics
Band
135
Art.-Nr.
103559
ISSN
0022-1996
eISSN
1873-0353
Page URI
https://pub.uni-bielefeld.de/record/2963031

Zitieren

Blanchard E, Willmann G. Unequal gains, prolonged pain: A model of protectionist overshooting and escalation. Journal of International Economics. 2022;135: 103559.
Blanchard, E., & Willmann, G. (2022). Unequal gains, prolonged pain: A model of protectionist overshooting and escalation. Journal of International Economics, 135, 103559. https://doi.org/10.1016/j.jinteco.2021.103559
Blanchard, E., and Willmann, G. (2022). Unequal gains, prolonged pain: A model of protectionist overshooting and escalation. Journal of International Economics 135:103559.
Blanchard, E., & Willmann, G., 2022. Unequal gains, prolonged pain: A model of protectionist overshooting and escalation. Journal of International Economics, 135: 103559.
E. Blanchard and G. Willmann, “Unequal gains, prolonged pain: A model of protectionist overshooting and escalation”, Journal of International Economics, vol. 135, 2022, : 103559.
Blanchard, E., Willmann, G.: Unequal gains, prolonged pain: A model of protectionist overshooting and escalation. Journal of International Economics. 135, : 103559 (2022).
Blanchard, Emily, and Willmann, Gerald. “Unequal gains, prolonged pain: A model of protectionist overshooting and escalation”. Journal of International Economics 135 (2022): 103559.

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