Economics Dictionary of ArgumentsHome
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| Market uncertainty: Market uncertainty in economics refers to the unpredictability of future market conditions. It arises from unknown or difficult-to-forecast factors like economic shifts, policy changes, technological advancements, or geopolitical events. This unpredictability makes it challenging for businesses to make informed decisions about investment, pricing, and production, potentially leading to reduced economic activity. See also Markets, Decision-making processes._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Dictionary of Arguments. | |||
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Economic Theories on Market Uncertainty - Dictionary of Arguments
Rieth I 4 Market Uncertainty/Economic theories/Boer/Rieth: microeconometric studies focus on the effects of the uncertainty that surrounds trade policy. Using China’s accession to the World Trade Organization (WTO) in 2001 as a natural experiment, Pierce and Schott (2016)(1) document that the associated decrease in uncertainty about import tariffs boosted bilateral trade but reduced US manufacturing employment; Handley and Limao (2017)(2) show that it raised Chinese exports to the US and lowered US prices significantly; and Feng et al. (2017)(3) document a similar pattern for Chinese and European firms. Conversely, Alessandria et al. (2019)(4) highlight wait-and-see behavior of US firms before China’s accession that dampened trade. Crowley et al. (2018)(5) use data on Chinese firms and document that firms subject to higher trade policy uncertainty engage in less international trade. We* complement this microeconomic evidence by showing that these effects transmit to the macroeconomy. Rieth I 5 But our results paint a more benign picture of trade policy uncertainty because of the export-boosting general equilibrium exchange rate effects. Another explanation of the lower importance at the aggregate level would be that some of the differential effects across firms or industries cancel out. >Market uncertainty/Rieth, >Tariff history. * Lukas Boer and Malte Rieth (2024). The Macroeconomic Consequences of Import Tariffs and Trade Policy Uncertainty. IMF Working Paper 24/13. International Monetary Fund. 1. Pierce, J. R. and Schott, P. K. (2016). The surprisingly swift decline of us manufacturing employment. American Economic Review, 106(7):1632–1662. 2. Handley, K. and Limao, N. (2017). Policy uncertainty, trade, and welfare: Theory and evidence for china and the united states. American Economic Review, 107(9):2731–83. 3. Feng, L., Li, Z., and Swenson, D. L. (2017). Trade policy uncertainty and exports: Evidence from china’s wto accession. Journal of International Economics, 106:20–36. 4. Alessandria, G. A., Khan, S. Y., and Khederlarian, A. (2019). Taking stock of trade policy uncertainty: Evidence from china’s pre-wto accession. Technical report, National Bureau of Economic Research. 5. Crowley, M., Meng, N., and Song, H. (2018). Tariff scares: Trade policy uncertainty and foreign market entry by chinese firms. Journal of International Economics, 114:96–115._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. "Vs" indicates differences in content, not necessarily the chronological progression of a controversy. If a German edition is specified, the page numbers refer to this edition. |
Economic Theories Rieth I Malte Rieth Lukas Boer The Macroeconomic Consequences of Import Tariffs and Trade Policy Uncertainty. IMF Working Paper 24/13. International Monetary Fund. Washington, D.C. 2024 |
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