skip to content

Faculty of Economics

The impact of trade policy and exchange rate shocks on trade

Euro Flag
Title: The impact of trade policy and exchange rate shocks on trade

Sponsor: ESRC

Description: How will Brexit affect the development and growth of British manufacturing firms? Britain's popular referendum vote to exit from the European Union has created a great deal of uncertainty about the future of Britain's external trade relations with countries that belong to the European Union as well as with other major trading economies external to the EU, including the United States and China. With the government preparing for exit negotiations, little is known about the future external trade policy the UK government intends to establish with regard to European Union states as well as with non-EU countries. Two major and interrelated sources of uncertainty are (a) the future value of the pound sterling relative to the currencies of Britain's trading partners and (b) the future trade policy on imports into the UK as well as the future trade policy Britain's exports will face in the EU.

In this research project, we are conducting:

1. legal research on Britain's rights and obligations under the WTO and numerous bilateral investment treaties in order to focus the economic analysis of policy options (import tariffs, production subsidies) to those that the British government can legally use under international law;

2. economic research focused on trade policies, trade flows and trade impacts in order to predict the impact of Brexit and any proposed future trade agreements on British manufacturers that use imported inputs in their production, British firms that compete with imports in the UK market, on British exporters to EU and non-EU destinations and on workers and consumers in the UK; and

3. economic research on exchange rate pass through (ERPT) in order to forecast how changes in the value of the pound sterling will pass through into British import and export prices.

The UK in a Changing Europe website:

Principal investigator

Dr Meredith Crowley


Dr Lorand Bartels

Post-doc research associate

Lu Han

PhD student

Oliver Exton

External member

Dr Huasheng Song

Published Papers

Crowley, M.A. and Hillman, J.A. Slamming the door on trade policy discretion? The WTO appellate body's ruling on market distortions and production costs in EU-Biodiesel (Argentina), (2018) World Trade Review
Bartels, L. The UK's Status in the WTO after Brexit, (2017) SSRN
Corsetti, C., Kuester, K. and Müller, G. J. Fixed on Flexible Rethinking Exchange Rate Regimes after the Great Recession, (2017) IMF Economic Review
Bartels, L. The UK's WTO Schedules, (2017) Global Trade and Customs Journal
Corsetti, G. Comments on "Obstfeld and Rogoff's international macro puzzles: a quantitative assessment" by J. Eaton, S. Kortum and B. Neiman, (2016) Journal of Economic Dynamics and Control
Corsetti, G. and Dedola, L. The "mystery of the printing press" monetary policy and self-fulfilling debt crises, (2016) Journal of the European Economic Association
Bown, C. P. and Crowley, M. Emerging economies, trade policy, and macroeconomic shocks, (2014) Journal of Development Economics
Crowley, M. Tuna-dolphin II: a legal and economic analysis of the appellate body report, (2014) World Trade Review

Blogs and Commentary

Bartels, L. Understanding the UK’s position in the WTO after Brexit (Part I – The UK’s status and its schedules), ICTSD
Bartels, L. Understanding the UK’s position in the WTO after Brexit (Part II – The consequences), ICTSD

Cambridge Working Papers in Economics

Ari, A., Corsetti, G. and Dedola, L. Debt Seniority and Sovereign Debt Crises , (2018) CWPE1831
Crowley, M. Understanding the challenges to the world trading system, (2018) CWPE1825
Corsetti, G., Dedola, L. and Leduc, S. Exchange Rate Misalignment, Capital Flows, and Optimal Monetary Policy Trade-offs, (2018) CWPE1822
Corsetti, G., Duarte, J. B. and Mann, S. One Money, Many Markets - A Factor Model Approach to Monetary Policy in the Euro Area with High-Frequency Identification, (2018) CWPE1816
Corsetti, G., Crowley, M., Han, L. and Song, H. Markups and Markets: A New Empirical Framework and Evidence on Exporters from China, (2018) CWPE1815

Authored Book

Giancarlo, C., Feld, L.P., Lane, P.R., Reichlin, L A new start for the Eurozone: dealing with debt, (2015) Monitoring the Eurozone - CEPR

Chapter in Book

Bown, C.P. and Crowley, M.A. The empirical landscape of trade policy, (2016) in the book: Handbook of commercial policy, Volume 1 - Elsevier
Crowley, Meredith Why are safeguards needed in a trade agreement?, (2010) in the book: Law and econmics of contingent protection in international trade - Cambridge University Press
Corsetti, G., Dedola, L. and Leduc, S. Optimal monetary policy in open economies, (2010) in the book: Handbook of monetary economics - North-Holland
How does the US see Brexit? - Published on: Tuesday 19th June 2018
In this Royal Economic Society (RES) video Dr. Meredith Crowley looks at American attitudes, the potential for new trading partners and negative responses towards globalisation.

UK-EU relations after Brexit - Published on: Friday 8th June 2018
Dr. Meredith Crowley was quoted in House of Lords EU Committee Report issued 8 June 2018 on on UK-EU relations after Brexit on p. 21 (para. 40 and 42) and p. 31 (para 83) the future trading relationship, prospects for FTAs with new partners, and regulatory divergence.

US steel tariffs imposed on EU and UK - Published on: Monday 4th June 2018
Dr. Meredith Crowley has given live interviews to AlJazeera TV and LBC Radio and been interviewed by The New York Times and BBC News regarding the US tariffs on steel and aluminium imported from the EU (including the UK)

Reassessing the Fiscal and Monetary Framework in EMU - Published on: Wednesday 16th May 2018
Prof. Giancarlo Corsetti presented at the State of the Union conference, Solidarity and Union, in Florence. He spoke on Reassessing the Fiscal and Monetary Framework in the Economic and Monetary Union (EMU). You can watch his talk on the Cambridge-INET site.

The Future UK-EU Trade Relationship - Published on: Thursday 3rd May 2018
Dr. Meredith Crowley and Oliver Exton have written a blog for The UK in a Changing Europe website on "The Future UK-EU Trade Relationship".

Post-Brexit UK-EU Relations - Published on: Sunday 15th April 2018
Dr. Meredith Crowley will give evidence to the House of Lords EU Committee on the future relationship between the UK and the EU. Dr. Crowley's testimony will be broadcast live from 15:00 on Tuesday 17 April.

Impact of US-China Trade War on UK Industry - Published on: Friday 6th April 2018
Dr. Meredith Crowley discusses how a US-China trade war will impact UK industry as well as post-Brexit trade agreements, on BBC Radio Four, The Briefing Room - “Can you win a trade war?”, presented by David Aaronovitch.

Dr. Crowley Quoted in the New York Times - Published on: Tuesday 27th March 2018
Dr. Meredith Crowley was quoted by the New York Times in their article "Trump Says Getting Tough on Chinese Trade Will Empower U.S. He Risks the Opposite"

Dr. Crowley Discusses Research Findings on BBC World Service - Published on: Monday 26th March 2018
Dr. Meredith Crowley discussed the findings of the paper "Markups and Markets: A New Empirical Framework and Evidence on Exporters from China" (joint with Giancarlo Corsetti, Lu Han and Huasheng Song) in an interview with Fergus Nicoll of BBC World Service Business Matters. Dr. Crowley's interview discussing the research conducted at Cambridge starts at 09:30.

Prof. Corsetti Gives Deutsche Bundesbank and IMF Keynote Speeches - Published on: Wednesday 21st March 2018
Prof. Giancarlo Corsetti has two Keynote Speeches this week. At the Deutsche Bundesbank's "Fiscal Policy in EMU – The Way Ahead", in Frankfurt and the IMF Conference "Many Objectives or Too Few Instruments?" in Washington DC.

Plenary Panel on Brexit - Published on: Tuesday 20th March 2018
As part of the Royal Economics Society's Annual Conference in Brighton, there will be a Plenary Panel on Brexit - "The View on Brexit from Abroad: New Opportunities or Damage Control?". Dr. Meredith Crowley will be speaking as part of the panel.

RES Annual Conference 2018 Brighton - Brexit Event - Published on: Wednesday 14th March 2018
As part of the Royal Economics Society's Annual Conference in Brighton, the RES is holding a debate 'One year till Brexit: Are we nearly there yet?'. Dr. Meredith Crowley will speak on the open-to-the-public panel debating Brexit. Titckets are available through EventBrite.

Financial Times Brexit Briefing - Published on: Monday 19th February 2018
Dr. Meredith Crowley's blog on 'Response to leaked government Brexit analysis' was included in the Financial Times Brexit briefing.

BBC News - Dr. Crowley talks UK and the Customs Union - Published on: Tuesday 6th February 2018
Dr. Meredith Crowley was interviewed by Kamal Ahmed (Economics Editor) for BBC News at Six, explaining the value to the UK of participating in the Customs Union with the EU. Dr Crowley's interview starts at 06.10. Video no longer available.

Euro Flag

Related Tags:



Customs Union


Steel Tariffs




Women in Economics

Related Links

Related Twitter Feeds