Hidden causes and hidden effects: Bilateral trade imbalances

Alejandro Cunat, Robert Zymek

Research output: Other contribution

Abstract / Description of output

Most countries exhibit large variation in bilateral trade balances across their trade partners. This column argues that it is possible to use gravity trade models to describe the sources of this variation with greater clarity, but that a large portion of the variation still remains poorly understood. It also shows that tariffs imposed during the US-China trade war will reduce the US-China trade deficit in the long run, but only by worsening the US trade balance with other trade partners almost one-for-one.
Original languageEnglish
TypeVoxEU Article
Media of outputWeb
Publication statusPublished - 17 Feb 2020


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