Profits, Scale Economies, and the Gains from Trade and Industrial Policy
研究了在存在规模经济或利润加成导致部门资源错配时，次优贸易限制政策的有效性，发现单独使用贸易政策或单边产业政策效果不佳，而国际协调的产业政策更具变革性。
This paper examines the efficacy of second-best trade restrictions at correcting sectoral misallocation due to scale economies or profit-generating markups. To this end, we characterize optimal trade and industrial policies in an important class of quantitative trade models with scale effects and profits, estimating the structural parameters that govern policy outcomes. Our estimates reveal that standalone trade policy measures are remarkably ineffective at correcting mis-allocation, even when designed optimally. Unilateral adoption of corrective industrial policies is also ineffective due to immiserizing growth effects. But industrial policies coordinated internationally via a deep agreement are more transformative than any unilateral policy alternative.