"Forward-Looking Exporters" with Francois de Soyres, Erik Frohm, and Emily Highkin, July 2025. Forthcoming at Journal of Economic Dynamics and Control. IFDP
"Common Trade Exposure and Business Cycle Comovement" with Oscar Avila-Montealegre, Journal of International Economics, 2024. (Working paper version, replication files)
"The Aggregate Effects of Global and Local Supply Chain Disruptions: 2020-2022" with George Alessandria, Shafaat Khan, Armen Khederlarian, and Kim Ruhl, Journal of International Economics, 2023. (Working paper version)
"The Dynamic Effects of Multilateral Trade Policy with Export Churning," International Economic Review, 2023. (Working paper version, quantitative replication files)
"The Tariff Tax Cut: Tariffs as Revenue" with George Alessandria, Jiaxiaomei Ding, and Shafaat Khan, May 2025.
We evaluate the aggregate effects of a change in tariffs on the US and world economies when tariff revenue is used to enact fiscal reform. Our model combines a standard international model of fiscal policy with taxes and a dynamic model of trade participation and tariffs that allows for uncertainty and transitions. We consider effects of permanent and temporary tariffs–with and without retaliation–when tariff revenue is used to reduce taxes on capital or labor or to subsidize investment. Compared to a lump sum redistribution, using tariff revenue for these reforms always boosts economic activity. Key to our analysis is the effect of trade dynamics on import substitution, such that tariff revenue after an increase in tariffs is higher in the short run than in the long run. When increasing the tariff by 20 percentage points, the revenue raised is largest when tariffs are temporary, unilateral, and used to subsidize investment, increasing by about 2 percent of GDP. This case also yields a large temporary increase in the trade balance. We find the welfare-maximizing unilateral tariff is close to 18 percent when tariff revenue is used to subsidize investment compared to 0 percent under a lump sum redistribution. We also find cutting capital taxes does not generate as much growth as introducing an investment subsidy since tariffs raise the price of investment substantially.
"Trade Wars and Rumors of Trade Wars: The Dynamic Effects of the U.S.-China Tariff Hikes" with Trang Hoang, November 2024.
We use a general equilibrium dynamic trade model to study the effects of the U.S.--China tariff hikes on the global economy. Our model captures key trade patterns since the tariff hikes, such as the pace of the decline in U.S.--China bilateral trade and the reallocation of global imports from the U.S. toward China. Our model suggests that the welfare losses from the tariff hikes are quite large for both countries, though China's losses are larger because of size asymmetries. Expectations about the persistence of the tariff hikes shape aggregate dynamics in the short to medium run.
"Trade Policy is Real News: Theory and Evidence" with George Alessandria, May 2024.
We evaluate the aggregate effects of changes in trade barriers when these changes can be implemented with a lag and trade responds gradually to changes in trade barriers because firm-level trade costs make exporting a dynamic decision. Our model shows how expectations of changes in trade barriers affect the economy. We find that while decreases in trade barriers increase economic activity, expectations of lower future trade barriers temporarily decrease investment, hours worked, and output. Furthermore, canceling an expected decline in future trade barriers raises investment and output in the short-run but substantially lowers medium-run growth. These effects are larger for larger expected reforms. In the data, we find that countries with more trade growth after GATT rounds decreased investment and hours worked in the years leading to the tariff cuts as predicted by our model.
"Trade Policy is Real News: An Estimate of the Effects of Past, Present, and Future U.S. Trade Policy" with George Alessandria, 2020.
"Supply Chain Recessions" with George Alessandria, Shafaat Khan, Armen Khederlarian, and Kim Ruhl.
"Do RTAs always divert imports from non-members?" with Andrea Garcia and Shafaat Khan.