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The impact of trade policy and exchange rate shocks on trade - People

Principal investigator: Dr Meredith Crowley
Co-investigator: Professor Giancarlo Corsetti
Co-investigator: Dr Lorand Bartels
Post-doc research associate: Lu Han
PhD student: Oliver Exton
External member: Dr Huasheng Song

The impact of trade policy and exchange rate shocks on trade - Details

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: http://ukandeu.ac.uk/

Project Publications

Published Papers

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. 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
Corsetti, G., Dedola, L., and Leduc, S. The international dimension of productivity and demand shocks in the US economy, (2014) Journal of the European Economic Association

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

Corsetti, G., Crowley, M., Han, L. and Song, H. Markups and Markets: A New Empirical Framework and Evidence on Exporters from China, (2018) CWPE1815
Corsetti, G., Kuester, K. and Müller, G. J. Fixed on Flexible Rethinking Exchange Rate Regimes after the Great Recession, (2017) CWPE1729
Corsetti, G., Erce, A. and Uy, T. Official Sector Lending Strategies During the Euro Area Crisis, (2017) CWPE1730
Crowley, M. and Hillman, J. Slamming the door on trade policy discretion? The WTO Appellate Body's ruling on market distortions and production costs in EU-Biodiesel (Argentina), (2017) CWPE1739
Corsetti, G., Kuester, K. and Müller, G. J. The Case for Flexible Exchange Rates in a Great Recession, (2016) CWPE1644

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

Project Activities

BBC News - Dr. Crowley talks UK and the Customs Union - Publication Date: 2018-02-06
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.

Response to leaked Government Brexit analysis - Publication Date: 2018-02-01
The UK in a Changing Europe website have published a blog written by Dr Meredith Crowley, which is in response to a leaked Government Brexit report.

Dr. Crowley talks Brexit on BBC Radio 4 - Publication Date: 2018-01-26
Dr. Meredith Crowley and Gerard Lyons debate Brexit on BBC Radio 4 The World at One Programme. The Brexit segment starts at 19:29.

Faculty Brexit Research featured on Trade Talks Podcast - Publication Date: 2018-01-12
Soumaya Keynes (The Economist) and PIIE Senior Fellow Chad P. Bown spoke with Dr Meredith Crowley about her Brexit research on the Peterson Institute's Trade Talks Podcast.

Dr. Crowley to speak at Danish Institute for International Studies - Publication Date: 2018-01-03
Dr. Meredith Crowley is speaking on "Globalisation at a Crossroads" at the Danish Institute for International Studies in Copenhagen on 10 January 2018. Watch all the talks from the event on the DIIS website.

The Commons Library Blog Features Faculty's Brexit Research - Publication Date: 2017-12-18
The Commons Library have published a blog about the Parliamentary Office of Science and Technology event that Dr. Meredith Crowley and the Faculty's Brexit research team spoke at in October.

Faculty's Brexit Research Group Publish 'No Deal' Article on VoxEU - Publication Date: 2017-12-13
As part of the Faculty's Brexit Research Group, Professor Giancarlo Corsetti, Dr Meredith Crowley, Oliver Exton and Lu Han, have written an article "A granular analysis of the exposure of UK exports to EU tariffs, quotas and antidumping under 'no deal'" for VoxEU.

Prof. Corsetti to Deliver the Keynote Lecture at ESCB Workshop - Publication Date: 2017-12-13
Professor Giancarlo Corsetti is to deliver the keynote lecture "Exchange Rate Misalignment, Capital Flows and Optimal Monetary Policy Trade-offs" at the First Annual Workshop of the ESCB Research Cluster. The event will be held at the Bank of Spain in Madrid on November 16th and 17th 2017.

Prof. Corsetti and Dr Crowley Publish Brexit Article on Project Syndicate.Org - Publication Date: 2017-12-07
Professor Giancarlo Corsetti and Dr Meredith Crowley have published an opinion editorial on the UK's post-Brexit trade strategy, "The UK's Multilateral Trade Future" on Project Syndicate.Org.

Prof. Corsetti New Column in VOXeu - Publication Date: 2017-10-23
Professor Giancarlo Corsetti, Luca Dedola, Marek Jarocinski, Bartosz Mackowiak, Sebastian Schmidt have written a new joint column for VOXeu, on "Business cycle stabilisation in the Eurozone"

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