Saving distortions undervalued exchange rates and protectionism

Policies that distort domestic saving decisions have general equilibrium effects on trade flows and the real exchange rate. In particular increasing domestic savings keeps the real exchange rate undervalued depressing imports and increasing exports. However there are important differences between sa...

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Autores principales:	Costinot, Arnaud, Lorenzoni, Guido, Werning, Iván
Formato:	Artículo
Lenguaje:	eng
Publicado:	Banco Central de Chile 2019
Materias:	TIPO DE CAMBIO PROTECCIONISMO AHORRO E INVERSIÓN
Acceso en línea:	https://hdl.handle.net/20.500.12580/3900
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spelling	oai-20.500.12580-39002021-04-24T11:17:43Z Saving distortions undervalued exchange rates and protectionism Costinot, Arnaud Lorenzoni, Guido Werning, Iván TIPO DE CAMBIO PROTECCIONISMO AHORRO E INVERSIÓN Policies that distort domestic saving decisions have general equilibrium effects on trade flows and the real exchange rate. In particular increasing domestic savings keeps the real exchange rate undervalued depressing imports and increasing exports. However there are important differences between saving distortions and standard protectionist trade policies like tariffs. We use a simple twoperiod model to illustrate these differences by comparing a saving subsidy which keeps the exchange rate undervalued and a temporary import tariff. Both policies reduce current imports. However the first policy entails short-run welfare losses for the domestic country and short-run welfare gains for its trading partners the second policy has opposite welfare effects. 2019-11-01T00:07:08Z 2019-11-01T00:07:08Z 2015 Artículo 978-956-7421-47-3 https://hdl.handle.net/20.500.12580/3900 eng Series on Central Banking Analysis and Economic Policies no. 20 Attribution-NonCommercial-NoDerivs 3.0 Chile http://creativecommons.org/licenses/by-nc-nd/3.0/cl/ .pdf Sección o Parte de un Documento p. 143-158 application/pdf Banco Central de Chile
institution	Banco Central
collection	Banco Central
language	eng
topic	TIPO DE CAMBIO PROTECCIONISMO AHORRO E INVERSIÓN
spellingShingle	TIPO DE CAMBIO PROTECCIONISMO AHORRO E INVERSIÓN Costinot, Arnaud Lorenzoni, Guido Werning, Iván Saving distortions undervalued exchange rates and protectionism
description	Policies that distort domestic saving decisions have general equilibrium effects on trade flows and the real exchange rate. In particular increasing domestic savings keeps the real exchange rate undervalued depressing imports and increasing exports. However there are important differences between saving distortions and standard protectionist trade policies like tariffs. We use a simple twoperiod model to illustrate these differences by comparing a saving subsidy which keeps the exchange rate undervalued and a temporary import tariff. Both policies reduce current imports. However the first policy entails short-run welfare losses for the domestic country and short-run welfare gains for its trading partners the second policy has opposite welfare effects.
format	Artículo
author	Costinot, Arnaud Lorenzoni, Guido Werning, Iván
author_facet	Costinot, Arnaud Lorenzoni, Guido Werning, Iván
author_sort	Costinot, Arnaud
title	Saving distortions undervalued exchange rates and protectionism
title_short	Saving distortions undervalued exchange rates and protectionism
title_full	Saving distortions undervalued exchange rates and protectionism
title_fullStr	Saving distortions undervalued exchange rates and protectionism
title_full_unstemmed	Saving distortions undervalued exchange rates and protectionism
title_sort	saving distortions undervalued exchange rates and protectionism
publisher	Banco Central de Chile
publishDate	2019
url	https://hdl.handle.net/20.500.12580/3900
work_keys_str_mv	AT costinotarnaud savingdistortionsundervaluedexchangeratesandprotectionism AT lorenzoniguido savingdistortionsundervaluedexchangeratesandprotectionism AT werningivan savingdistortionsundervaluedexchangeratesandprotectionism
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Saving distortions undervalued exchange rates and protectionism

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