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Department of Economics

Quantitative Models of Commercial Policy


What tariffs would countries impose if they did not have to fear any retaliation? What would occur if there was a complete breakdown of trade policy cooperation? What would be the outcome if countries engaged in fully efficient trade negotiations? And what would happen to trade policy cooperation if the world trading system had a different institutional design? While such questions feature prominently in the theoretical trade policy literature, they have proven di¢ cult to address empirically, because they refer to what-if scenarios for which direct empirical counterparts are hard to find. In this chapter, I introduce research which suggests overcoming this difficulty by applying quantitative models of commercial policy.