New Article for Alessandro Barattieri

New Article for Alessandro Barattieri The article “Self-Harming Trade Policy? Protectionism and Production Networks” written by Alessandro Barattieri (ESG UQAM) and Matteo Cacciatore (HEC Montreal), has been published in the American Economic Journal: Macroeconomics. Using high frequency data on temporary trade barriers (TTBs), this article explores the impact of protectionism on employment. Importantly, the authors look both at the impact of protectionism on the employment of protected industries (i.e. Steel) and of the employment of downstream industries, which use protected industries’ output as intermediate inputs (i.e. engines or cars). The authors find that protectionism has small and insignificant beneficial effects in protected industries. The effects in downstream industries are negative, sizable, and significant. The employment decline follows an increase in prices, and a decline in stock market returns. The article has an important implication for economic policy: the increasing role of production networks makes protectionism even more harmful.