![]() ![]() Even if we track the market five trading days later (approximately one week of calendar days), we see that the market did not recover. Moreover, it is also quite striking how persistent this decline is. we see that there was a large decline of over 10%. Indeed, there is little evidence of anything out of the ordinary happening in the market before the announcements. The data reveal that in the five trading days before our events, stock-price movements were quite small. “We explore the persistence of these stock-market movements. suggests will drive decreases in the expected wage. These drops in the market imply substantial drops in expected profitability for U.S. event date and one China event date, with a total drop of 10.4% over all of the events, and 12.9% over the three-day windows (beginning the day before the announcement and extending one day after). “We see that the stock market fell on all of the event dates except one U.S. “The data reveal that there were large and persistent movements in stock prices and inflationary expectations following these trade-war announcements,” according to Amiti, Kong and Weinstein. decision to raise tariffs on $200 billion of Chinese goods up to 25% and others. tariff events only apply to China,” as discussed in the study, including the announcement on May 29, 2018, of a 25% tariff on $50 billion of Chinese imports, the announced U.S. On February 28, 2018, the administration announced it would imposed tariffs on steel and aluminum, which also affected China and other countries. tariff events and five China retaliation events.” The Trump administration announced tariffs on solar panels and washing machines on January 22, 2018, which were imposed on imports from China and other countries. The economists identified “11 trade-war announcement dates, comprising six U.S. GDP in 2019).” That is larger than the $1.7 trillion estimate in the loss of firm value in an earlier paper from the economists. ![]() The decline in stock market value caused by trade war announcements “amounted to a $3.3 trillion loss of firm value (equivalent to 16% of U.S. ![]()
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