Spring Meetings

OVERVIEW

Motivated by the renewed fear of geo-economic fragmentation from the pandemic, Russia’s invasion of Ukraine, and barriers between the US and China, this paper quantifies the economic costs of fragmentation due to potential barriers to international trade. Applying a novel empirical modeling approach to a newly developed dataset that accounts for granular production and trade in commodities, we quantify how various fragmentation scenarios affect real income in different country groups. We find that fragmentation-induced costs can be sizable, especially for low-income countries. Our work warns about the adverse and distributive effects of fragmentation in global trade.

SPEAKERS

Co-author