Time: 10:00 am - 11:30 am, Nov. 21st, 2025

Speaker: Dan Lyu (Chinese University of Hong Kong)

Venue: 1F, Wanzhong Building, Langrun Garden, Peking University

 

Abstract:

We derive optimal trade policies in a multi-country, multi-sector general-equilibrium model that unifies a wide range of supply-side assumptions. Under our CES supply system, which nests most existing specifications, two-country optimal tariffs and export taxes across sectors depend only on elasticity parameters and relative market shares. With multiple countries, country and sector interdependencies—due to the cross-country trade network—make optimal tariffs imposed by the home country differ across countries and sectors while converging within sectors. Only when foreign countries do not trade with each other do the home country's optimal policies depend solely on bilateral trade. Using trade data, we quantify optimal policies and find that ignoring interdependencies can lead to substantially lower welfare gains for the home country.

Speaker:

Professor Lyu is an Assistant Professor in the Department of Economics at the Chinese University of Hong Kong. She is the associate editor for the Journal of International Economics. Her research areas include international trade, macroeconomics, and the Chinese economy. Her papers have been published in journals such as the American Economic Review and the Journal of International Economics. She received her Ph.D. at the University of Chicago. Before joining the Chinese University of Hong Kong, she worked at the Department of Economics, the University of Rochester.