Asset markets, tariffs, and political risk
构建一个简单模型，研究外生政治风险如何通过关税不确定性影响消费与关税的关系，发现存在资产市场时，国内关税状态下的消费和效用低于外国关税状态，与无资产市场时的结论相反。
This paper examines a simple model in which exogenous political risk creates uncertainty about tariffs. The model predicts a relation between consumption and tariffs that differs radically from that implied by models without asset markets or political risk. Given the probability distribution of tariffs, domestic consumption and utility (ex post) are lower in states of the world with a domestic tariff and no foreign tariff than with a foreign tariff and no domestic tariff. This conclusion emerges despite the fact that the opposite would be obtained in the absence of asset markets. So economists should not be surprised if observed relations between consumption and tariffs differ from the predictions of static theory in either time series or cross-sections.