Keith Head, Thierry Mayer, 12 November 2016

Unlike technical progress in transport or communication technologies, regional trade agreements are political decisions that can be reversed, as Brexit and the campaign promises of President-elect Donald Trump to raise tariffs on imports from Mexico demonstrate. This column analyses the consequences for the car industry of these two examples of the dismantling of an RTA. Car production would fall significantly in the UK under Brexit and in Mexico under ‘Trumpit’ due to a combination of tariff-induced sales losses and increased plant costs.

Javier Cravino, Andrei Levchenko, 22 October 2016

Multinational production has become one of the most important means by which firms serve foreign markets. This column examines the role of multinational firms in aggregate business cycle transmission. The results suggest that the combined impact of all foreign multinationals is small but significant, accounting for about 10% of the productivity shocks in a typical country and leading to a somewhat more synchronised international business cycle.

Events

CEPR Policy Research