America first policy and long run growth

• Grant number: 18/15644-4
• Support Opportunities: Scholarships abroad - Research Internship - Doctorate
• Start date: October 01, 2018
• End date: August 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
• Supervisor: Jeremy Greenwood
• Host Institution: Escola de Economia de São Paulo (EESP). Fundação Getúlio Vargas (FGV). São Paulo , SP, Brazil
• Institution abroad: University of Pennsylvania, United States
• Associated to the scholarship: 18/10215-8 - America first policy and long run growth, BP.DR

Abstract

This particular research internship refers to the PhD thesis project (accepted by FAPESP) which 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 construct a theoretical model comprising trade,decision to produce abroad (also known as offshoring"), heterogeneous firms and technological progress. This understanding is specially 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 the Prof. Ph.D.Jeremy Greenwood and Prof. Ph.D. Jesus Fernandez-Villaverde, both from Universityof Pennsylvania (UPenn). (AU)