@article{Francois:333046,
      recid = {333046},
      author = {Francois, Joseph and Nelson, Douglas and Rojas-Romagosa,  Hugo},
      title = {Trade Wars and Trade Disputes: The Role of Equity and  Political Support},
      address = {2019},
      year = {2019},
      note = {Presented at the 22nd Annual Conference on Global Economic  Analysis, Warsaw, Poland},
      abstract = {The theoretical and quantitative analysis of trade wars is  grounded in a relatively narrow treatment of optimal tariff  theory and non-cooperative Nash equilibria. The lynchpin of  this analytical framework is the assumption that trade  policymakers are rational and have a simple  well-established objective function to optimize. We argue  that the preferred specification of this objective function  ignores inequality at its peril. Working with a numerical  model, we show that including equity (a primary focus of  the earlier literature) as a determinant of social welfare  can substantially change the noncooperative Nash outcome.  In addition, when policy-makers do not meet the core  assumption of rationality on trade policy, the economic  outcomes of trade wars may also be very different from what  estimates grounded in optimal tariff theory would suggest.},
      url = {http://ageconsearch.umn.edu/record/333046},
}