Agnès Bénassy-Quéré, Matthieu Bussière, Pauline Wibaux, 16 August 2018

Recent events on the international stage have reignited the debate on trade and currency wars. This column compares two forms of non-cooperative policies – import tariffs and currency devaluations – within a single framework. The results show that tariffs and devaluations do not have equivalent effects on trade flows. A 1% depreciation of the importer's currency reduces imports by around 0.5% in current dollars, whereas an increase in import tariffs by 1 percentage point reduces imports by around 1.4%.

Ricardo Cabral, 20 October 2011

The EU is presently a source of great instability that leaders have yet to tackle. This column argues the current policy response is misguided. The adjustment programmes are bound to fail to achieve sustainable budget deficits, and may result in an unprecedented destruction of economic activity. Rather, the EU policy response should explicitly target improvements to trade and income balances, and address high external debt through debt restructuring.

Events

CEPR Policy Research