America first policy and long run growth

• Grant number: 18/10215-8
• Support Opportunities: Scholarships in Brazil - Doctorate
• Start date: August 01, 2018
• End date: November 23, 2019
• Field of knowledge: Applied Social Sciences - Economics - Growth, Fluctuations and Economic Planning
• Principal Investigator: Tiago Vanderlei de Vasconcelos Cavalcanti
• Grantee: Matheus Sesso Gay
• Host Institution: Escola de Economia de São Paulo (EESP). Fundação Getúlio Vargas (FGV). São Paulo , SP, Brazil
• Associated scholarship(s): 18/15644-4 - America first policy and long run growth, BE.EP.DR

Abstract

The PhD thesis proposed in this project aims to understand how "America First Policy" used in Trump government can affect growth, relative outputs, wage ratios and technological bias. This policy can be understood as one to promote an increase in the relative distance of American GDP to other economies. The contribution of the paper is in understanding how some specic policies used by American government (changes in: import tariffs, fixed costs to produce abroad, payroll taxes) can impact the variables aforementioned. In order to achieve this goal we aim to construct a theoretical model comprising trade, decision to produce abroad (also known as "offshoring"), heterogeneous firms and technological progress. This understanding is especially important nowadays, when many nationalist governments are emerging in an already very integrated world. Given the complexity of the model, a large part of the results and extensions will be estimated numerically. In this part of the paper we are going to count on the help of Prof. Ph.D. Jeremy Greenwood and Prof. Ph.D. Jesús Fernández-Villaverde, both from University of Pennsylvania (Upenn). (AU)