Nuremberg Research Seminar in Economics on 9 November 2022 – Zoom – Start: 16:45
You are invited to join the weekly Nuremberg Research Seminar in Economics on 9 November 2022 at 16:45 pm. The seminar will be held via Zoom. Mary Amiti (Federal Reserve Bank of New York) will be talking about „Trade Protection, Stock-Market Returns, and Welfare “.
More information can be found here:
This paper develops a method of using financial data to understand the expected impact of trade policy on welfare and other real variables when the policy has heterogeneous and uncertain impacts on firms. We embed a firm-level specific factors model in a consumption capital asset pricing model to map expected cash-flow movements into expected movements in productivity, wages, and welfare. Using our framework, we find that the U.S.-China trade war caused increases in uncertainty and large declines in U.S. stock prices, expected cash flows, and expected productivity. We estimate that the expected decline in U.S. welfare is 4.9 percentage points.