The Effect of the U.S.-China Trade War on U.S. Investment / Mary Amiti, Sang Hoon Kong, David Weinstein.

Format:

Book

Author/Creator:

Amiti, Mary.

Contributor:

National Bureau of Economic Research.

Kong, Sang Hoon.

Weinstein, David.

Series:

Working Paper Series (National Bureau of Economic Research) no. w27114.

NBER working paper series no. w27114

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

We develop a new method of quantifying the impact of policy announcements on investment rates that makes use of stock market data. By estimating the effect of U.S.-China tariff announcements on aggregate returns and the differential returns of firms exposed to China, we identify their effect on treated and untreated firms. We show theoretically and empirically that estimates of policy-induced stock-market declines imply lower returns to capital, which lowers investment rates. We estimate that the tariff actions through 2018 and 2019 will lower the investment growth rate of listed U.S. companies by 1.9 percentage points by the end of 2020.

Notes:

Print version record

May 2020.