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Median voter theory applied to trade policy predicts positive tariffs in capital‐abundant countries and negative tariffs in labor‐abundant countries. Negative tariffs are rare, and this paper reconciles the median voter theory with observed protectionism across countries. By considering large countries, I show the optimal tariff is a sum of the median voter component and a positive term of trade component. Positive terms of trade effects raise tariffs in all countries, and can overcome the negative median voter component in labor‐abundant countries. Testing the tariff prediction with cross‐section and panel data from the 1990s, I show the median voter component is negative in labor‐abundant countries and positive in capital‐abundant countries. As expected, terms of trade effects raise tariffs across all countries and are stronger among nonmembers of the WTO.

Firms face competing needs to expand product variety and reduce production costs. Access to larger markets enables innovation to reduce costs. Although firm scale increases, foreign competition reduces markups. Firms' ability to recapture lost markups depends on the interplay between within-firm competition and across-firm competition. Narrowing product variety eases within-firm competition but lowers market share. I provide a theory detailing the impact of trade policy on product and process innovation. Unbundling innovation provides new insights into welfare gains and innovation policy. Product innovation increases welfare beyond standard gains from trade. The relative returns to innovation policy change with trade liberalization. (JEL D24, F13, O31)

Evidence shows long-term unemployment (LTU) can have life-long scarring impacts on the future employment and earning prospects of individuals and lead to an overall deterioration in the wellbeing of communities. This article examines long-term unemployment in India, providing some of the first estimates from a panel of individuals before and during the pandemic. It shows that LTU makes up a substantial proportion of unemployment among the working-age population, particularly among young workers who have fared even worse since the pandemic. Existing benefits have proven inadequate in addressing long-term unemployment and young workers have a strong desire for active labour market policies from the government to address the worklessness crisis. A national-level commitment to active labour market policies could prevent a lost generation of young workers from falling into long-term unemployment and the ills that accompany it.

Evidence shows long-term unemployment (LTU) can have life-long scarring impacts on the future employment and earning prospects of individuals and lead to an overall deterioration in the wellbeing of communities. This article examines long-term unemployment in India, providing some of the first estimates from a panel of individuals before and during the pandemic. It shows that LTU makes up a substantial proportion of unemployment among the working-age population, particularly among young workers who have fared even worse since the pandemic. Existing benefits have proven inadequate in addressing long-term unemployment and young workers have a strong desire for active labour market policies from the government to address the worklessness crisis. A national-level commitment to active labour market policies could prevent a lost generation of young workers from falling into long-term unemployment and the ills that accompany it.

The Brexit vote precipitated the unravelling of the UK's membership of the world's deepest economic integration agreement. This paper reviews evidence on the realized economic effects of Brexit. The 2016 Brexit referendum changed expectations about future UK-EU relations. Studying its consequences provides new insights regarding the economic impacts of news and uncertainty shocks. Voting for Brexit had large negative effects on the UK economy between 2016 and 2019, leading to higher import and consumer prices, lower investment, and slower real wage and GDP growth. However, at the aggregate level, there was little or no trade diversion away from the EU, implying that many of the anticipated long-run effects of Brexit did not materialize before the new UK-EU trade relationship came into force in 2021.

In India-Export Measures, the United States challenged a range of Indian measures as prohibited export-contingent subsidies, and a WTO panel largely agreed. This article examines the factors at play in the United States' decision to bring the challenge. At the level of policy, the United States case reflects India's graduation from the protections afforded developing nations' export-contingent subsidies under the Agreement on Subsidies and Countervailing Measures. A closer examination, however, shows that India ramped up its export-contingent subsidies just as the SCM Agreement required it to wind those subsidies down. Moreover, the expanded Indian subsidies led to increased import competition with the politically influential metals and pharmaceutical sectors in the United States, which pushed the U.S. challenge. We reflect on the larger implications of the challenge for the future of trade rules on industrial policy. In particular, we note that the United States pursued a trade enforcement policy that would have the effect of increasing pharmaceutical prices in the United States, by reducing subsidies for imported generic drugs, at a time at which the Trump administration allegedly was trying to reduce the price of prescription drugs. This disconnect suggests the need for both greater transparency in trade policy and greater governmental coordination on the connection between trade policy and other policy priorities.

In India–Export Related Measures, the United States challenged a range of Indian measures as prohibited export-contingent subsidies, and a WTO panel largely agreed. This article examines the factors at play in the United States' decision to bring the challenge. At the level of policy, the United States case reflects India's graduation from the protections afforded developing nations' export-contingent subsidies under the Agreement on Subsidies and Countervailing Measures. A closer examination, however, shows that India ramped up its export-contingent subsidies just as the SCM Agreement required it to wind those subsidies down. Moreover, the expanded Indian subsidies led to increased import competition with the politically influential metals and pharmaceutical sectors in the United States, which pushed the US challenge. We reflect on the larger implications of the challenge for the future of trade rules on industrial policy. In particular, we note that the United States pursued a trade enforcement policy that would have the effect of increasing pharmaceutical prices in the United States, by reducing subsidies for imported generic drugs, at a time when the Trump administration allegedly was trying to reduce the price of prescription drugs. This disconnect suggests the need for both greater transparency in trade policy and greater governmental coordination on the connection between trade policy and other policy priorities.

In India–Export Related Measures, the United States challenged a range of Indian measures as prohibited export-contingent subsidies, and a WTO panel largely agreed. This article examines the factors at play in the United States' decision to bring the challenge. At the level of policy, the United States case reflects India's graduation from the protections afforded developing nations' export-contingent subsidies under the Agreement on Subsidies and Countervailing Measures. A closer examination, however, shows that India ramped up its export-contingent subsidies just as the SCM Agreement required it to wind those subsidies down. Moreover, the expanded Indian subsidies led to increased import competition with the politically influential metals and pharmaceutical sectors in the United States, which pushed the US challenge. We reflect on the larger implications of the challenge for the future of trade rules on industrial policy. In particular, we note that the United States pursued a trade enforcement policy that would have the effect of increasing pharmaceutical prices in the United States, by reducing subsidies for imported generic drugs, at a time when the Trump administration allegedly was trying to reduce the price of prescription drugs. This disconnect suggests the need for both greater transparency in trade policy and greater governmental coordination on the connection between trade policy and other policy priorities.