Quantifying the unemployment effects of Trump’s protectionist policies (VOX)

Unemployment is absent from most quantitative trade models in the academic literature. Using a trade model that also includes unemployment and data between 2001 and 2008, this column shows that repealing NAFTA and the imposition of 20% bilateral tariffs between the US and Mexico in all sectors would reduce welfare by 0.31% in the US and by 6.6% in Mexico. An US increase of trade barriers on motor vehicles against imports from all countries bar Mexico and Canada would lead to a decrease in long-run welfare and employment in both Mexico and the US as well as in major car-producing countries.

https://voxeu.org/article/quantifying-unemployment-effects-trump-s-protectionist-policies

Céline Carrère, Anja Grujovic, Frédéric Robert-Nicoud

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