Chenyue Hu (UCSC)
Date & Time
Nov 16, 2022
from
03:30 PM to
05:00 PM
Location
1113 Social Science and Humanities Blue room
Description
Abstract:
This paper develops an approach for solving a multi-country model where financial and trade flows are both endogenously determined under bilateral frictions. The approach combines the perturbation method for portfolio choice analysis in a DSGE framework and the hat algebra technique from the trade literature. Comparative statics employing this approach captures the interaction of financial and trade channels in the general equilibrium, which is not fully characterized by standard international trade or macro models. Policy experiments based on the model quantify the impacts of tariffs and financial frictions as barriers to globalization.