Related papers: Trade Wars with Trade Deficits
Bilateral trade is one of the most natural and important forms of economic interaction: A seller has a single, indivisible item for sale, and a buyer is potentially interested. The two parties typically have different, privately known…
In a dynamic economy, we characterize the fiscal policy of the government when it levies distortionary taxes and issues defaultable bonds to finance its stochastic expenditure. Default may occur in equilibrium as it prevents the government…
I investigate how explicit cartels, known as ``shipping conferences", in a global container shipping market facilitated the formation of one of the largest globally integrated markets through entry, exit, and shipbuilding investment of…
In this paper, we investigate the effect of the U.S.--China trade war on stock markets from a financial contagion perspective, based on high-frequency financial data. Specifically, to account for risk contagion between the U.S. and China…
We consider a market in which both suppliers and consumers compete for a product via scalar-parameterized supply offers and demand bids. Scalar-parameterized offers/bids are appealing due to their modeling simplicity and desirable…
A major problem in fair division is how to allocate a set of indivisible resources among agents fairly and efficiently. The goal of this work is to characterize the tradeoffs between two well-studied measures of fairness and efficiency --…
We study the problem of social welfare maximization in bilateral trade, where two agents, a buyer and a seller, trade an indivisible item. We consider arguably the simplest form of mechanisms -- the fixed-price mechanisms, where the…
The study of US-China relations has always been a crucial topic in our economic development [4][5][7], and the US presidential election plays an integral role in shaping these relations. The presidential election is held every four years,…
We study the perfect information Nash equilibrium between a broker and her clients -- an informed trader and an uniformed trader. In our model, the broker trades in the lit exchange where trades have instantaneous and transient price impact…
We explore the impact of mutual altruism among the players belonging to the same set -- their tribe -- in a partition of all players in arbitrary strategic games upon the quality of equilibria attained. To this end, we introduce the notion…
Rising inequality is a critical concern for societies worldwide, to the extent that emerging high-growth economies such as China have identified common prosperity as a central goal. However, the mechanisms by which digital disruptions…
This paper analyzes whether a minimum wage should be used for redistribution on top of taxes and transfers. I characterize optimal redistribution for a government with three policy instruments -- labor income taxes and transfers, corporate…
Multilateral index numbers are often used to make claims about welfare, such as treating PPPs as cross-country costs of living or real incomes as indicators of living standards. However, such interpretations may not be consistent with the…
The expression "wage transition" refers to the fact that over the past two or three decades in all developed economies wage increases have levelled off. There has been a widening divergence and decoupling between wages on the one hand and…
During the last decades two important contributions have reshaped our understanding of international trade. First, countries trade more with those with whom they share history, language, and culture, suggesting that trade is limited by…
Global financial systems are undergoing strategic shifts as geopolitical tensions reshape international trade and payments. The United States (US)-China trade war, sanctions regimes, and rising concerns over the weaponization of financial…
In this paper, we analyze the long-term distributive impact of climate change through rising food prices. We use a standard incomplete markets model and account for non-linear Engel curves for food consumption. For the calibration of our…
In most of the recent literature on state capacity, the significance of wars in state-building assumes that threats from foreign countries generate common interests among domestic groups, leading to larger investments in state capacity.…
We study the welfare effects of overreaction to information in the form of diagnostic expectations in markets with asymmetric information, and the effect of a simple intervention in the form of a tax or a subsidy. A large enough level of…
The growth of the sharing economy is driven by the emergence of sharing platforms, e.g., Uber and Lyft, that match owners looking to share their resources with customers looking to rent them. The design of such platforms is a complex…