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Reposted by Ahmad Lashkaripour

Thiru Balasubramaniam @thirugeneva.bsky.social · 21d

Professor Robert Staiger, the Roth Family Distinguished Professor in the Arts and Sciences and Professor of Economics at Dartmouth College, has been appointed as the new Chief Economist of the World Trade Organization. @wto.org

Robert W. Staiger - Wikipedia

en.wikipedia.org

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Reposted by Ahmad Lashkaripour

Jacob Edenhofer @jacobedenhofer.bsky.social · Apr 7

First instalment of my substack primer on right-wing populism in Europe is out.
jacobedenhofer.substack.com/p/explaining...

Explaining the emergence and consolidation of right-wing populism: Part I

Stylised facts, or what has actually happened?

jacobedenhofer.substack.com

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Reposted by Ahmad Lashkaripour

Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 29

We’ve written a review on *New Industrial Policy* for the Oxford Research Encyclopedia.

It offers a unified framework for analyzing IP effects and survey evidence from both ex post event studies and ex ante model-based evaluations of IP.

🧵thread on key takeaways (link below)

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Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 29

The *ex ante* approach, of course, has its own limitations. However, it can map out the frontier of policy outcomes. Strikingly, in many cases, even optimally designed policies yield only modest gains, which is informative in itself.

link to article:
alashkar.pages.iu.edu/New_Industri...

Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 29

13. We then clarify the logic behind *ex ante* policy evaluation, a growing yet misunderstood method.

At its core, this approach involves estimating elasticity parameters using in-sample price & quantity data, using them to simulate out-of-sample quantities under optimal prices

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Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 29

(b) Heterogeneous treatment effects

Industrial policy is justified because the marginal return to adding resources (VMPL) differs across units. Otherwise, there's no rationale for policy. Hence, contexts where industrial policy is warranted are inevitably characterized by HTE.

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Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 29

11. The identification challenges are twofold:

(a) SUTVA violation
By design, industrial policy reallocates factors to treated units by drawing them from non-treated units. So, spillover effects are inherent to the policy itself.

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Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 29

10. Design-based evaluations face two challenges: measurement and identification.

The measurement issue arises because VMPL is unobserved, while welfare evaluation boils down to whether the policy reallocates factors to high-VMPL sectors and firms or not

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Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 29

9. We review the empirical and quantitative examinations of industrial policy, classifying them into two groups:

a) *ex post* evaluations using design-based methods such as DiD

b) *ex ante* model-based evaluations of optimally designed policies

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Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 29

8. At a deeper level trade openness presents a dilemma for industrial policy effectiveness—a point more recently emphasized in the literature.

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Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 29

7. Another important but often-overlooked point is that trade measures, such as import restrictions or export promotion, are rarely an optimal or efficient form of industrial policy.

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Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 29

6. Open economies face additional challenges when designing IP:

a. Trade introduces a *siphoning effect* where taxes paid by domestic households are partially used to subsidize consumption abroad via exports.

b. Industrial policy distorts relative trade prices ---> disrupts the gains from trade

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Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 29

5. An economy-wide *optimal* policy is rarely implemented in practice. More often, a a few sectors are promoted in isolation (e.g., South Korea’s HCI drive).

In such cases, the *constrained-optimal* policy depends on the upstreamness of the targeted industries.

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Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 29

4. The *welfare gains* from optimal policy, however, depend on which sectors are promoted.

If industrial policy promotes upstream sectors operating below their efficient scale, it would generate larger gains.

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Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 29

3. We formalize this argument by deriving the optimal policy in a unified framework with various distortions and input-output networks.

Contrary to common instinct, the optimal policy is *newtrok-blind* and *demand-blind*. It only depends on the size of the distortion wedge.

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Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 29

2. We first outline the welfarist rationale for industrial policy: with externalities or market failures, the *value marginal product of labor (VMPL)* is different across sectors

---> Welfare can be improved by reallocating resources from low-VMPL to high-VMPL sectors.

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Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 29

We’ve written a review on *New Industrial Policy* for the Oxford Research Encyclopedia.

It offers a unified framework for analyzing IP effects and survey evidence from both ex post event studies and ex ante model-based evaluations of IP.

🧵thread on key takeaways (link below)

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Reposted by Ahmad Lashkaripour

Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 13

Our paper on the long-term effects of the Trump 2 tariffs is out in the Journal of International Economics.

We’ve made it open access:
doi.org/10.1016/j.ji...

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Ahmad Lashkaripour @lashkaripour.bsky.social · Aug 13

Our paper on the long-term effects of the Trump 2 tariffs is out in the Journal of International Economics.

We’ve made it open access:
doi.org/10.1016/j.ji...

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Reposted by Ahmad Lashkaripour

NBER @nber.org · Aug 10

Developing a framework to examine how beneficial transport infrastructure investments are, as well as other transport policies, from Dave Donaldson https://www.nber.org/papers/w34096

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Reposted by Ahmad Lashkaripour

Ahmad Lashkaripour @lashkaripour.bsky.social · Jul 9

Our paper is officially out 🎉

We argue that climate clubs show promise:

- A climate club with coordinated penalties could curb 68% of excess emissions from free-riding

-Unilateral carbon tariffs? Not nearly as effective

Econometrica @ecmaeditors.bsky.social · Jul 7

We study how trade policy can reduce global emissions. Unilateral carbon border taxes have limited efficacy at cutting foreign emissions. By contrast, coordinated trade penalties under a climate club prove highly effective. buff.ly/NEE3Uy8

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Ahmad Lashkaripour @lashkaripour.bsky.social · Jul 9

Our paper is officially out 🎉

We argue that climate clubs show promise:

- A climate club with coordinated penalties could curb 68% of excess emissions from free-riding

-Unilateral carbon tariffs? Not nearly as effective

Econometrica @ecmaeditors.bsky.social · Jul 7

We study how trade policy can reduce global emissions. Unilateral carbon border taxes have limited efficacy at cutting foreign emissions. By contrast, coordinated trade penalties under a climate club prove highly effective. buff.ly/NEE3Uy8

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Reposted by Ahmad Lashkaripour

Econometrica @ecmaeditors.bsky.social · Jul 7

We study how trade policy can reduce global emissions. Unilateral carbon border taxes have limited efficacy at cutting foreign emissions. By contrast, coordinated trade penalties under a climate club prove highly effective. buff.ly/NEE3Uy8

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Reposted by Ahmad Lashkaripour

CESifo @cesifo.org · Jun 4

New Paper Alert!📢
"Making America Great Again? The Economic Impacts of Liberation Day Tariffs"👨‍🦰
by Anna Ignatenko @lashkaripour.bsky.social‬ Luca Macedoni @simonovska.bsky.social‬

This model estimates U.S. welfare and global employment under optimal tariff retaliation📉:
www.ifo.de/en/cesifo/pu...

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Reposted by Ahmad Lashkaripour

Ahmad Lashkaripour @lashkaripour.bsky.social · May 14

A new version of our trade war paper is out at the NBER this week.

Key update: factoring in tariffs on intermediate inputs nearly wipes out any terms-of-trade gains from reciprocal tariffs and greatly amplifies the cost of retaliation for the US economy.

NBER @nber.org · May 14

Examining the effects of Liberation Day tariffs on US prices, employment, deficit, and welfare, from Anna Ignatenko, Ahmad Lashkaripour, Luca Macedoni, and Ina Simonovska https://www.nber.org/papers/w33771

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