"All models are wrong but some are useful." (George E. P. Box)
In my view, economics is a social science. Therefore, I strive for combining academic rigor with relevance for economic policy in my research. I strongly believe in economic and econometric modeling to generate useful insights into current economic issues while making explicit its underlying assumptions. The key question for any economic analysis is not whether the used model is an exact description of reality - it will never be - but whether it allows us to shed light onto pressing economic issues for today's policy makers and society at large.
Below, you can find some of my writing on the effects of the Trump tariffs on the Valencian economy, amongst others.
Below, you can find some of my writing on the effects of the Trump tariffs on the Valencian economy, amongst others.
The Trade Effects of the Trump tariffs on the Valencian economy
The second Trump presidency is characterized by high trade policy uncertainty and higher tariffs applied across the US' trade partners. Most studies focus on country-level evaluation of the trade effects. In this study, comissioned by the Generalitat Valenciana via its Instituto Valenciano de Investigaciones Económicas (IVIE), jointly with coauthors from the Universitat Jaume I and IVIE, I evaluated the trade effects of the tariffs imposed on the EU with a particular focus on the trade effects for Spain and in particular the autonomous region of the Valencian community. We use detailed HS6-digit trade and tariff data to highlight which sectors of the Valencian economy are particularly exposed to Trump's tariff increases: In particular machinery equipments, ceramic products, chemical products, as well as footwear. The total calculated trade reduction of the tariffs amounts 1.9 billion €, or about 5.2% of total Valencian exports. You can find the study here.
The Potential Welfare Effects of the Transatlantic Trade and Investment Partnership (TTIP)
The currently negotiated TTIP is hotly debated in both academic research as well as the public policy arena. Together with my coauthors from the ifo Institute in Munich and the University of Bayreuth, I have analyzed the income, employment and welfare effects of a potential TTIP in a series of studies.
Particularly, I have worked on a study for the Bertelsmann Foundation which looks into the employment effects of TTIP using the methodology explained in one of my working papers with Mario Larch. For the Bertelsmann study, click here. For the underlying methodology working paper, click here. Jointly with my co-authors, I have published a study in Economic Policy which investigates in depth the robustness of our results. You can read a non-technical abridged version of the Economic Policy paper here. For the (gated) full paper in Economic Policy, please click here.
I have also co-authored a study commissioned by the Austrian Ministry of Economics, Family and Youth on the effects of TTIP and other currently negotiated mega-regionals with a specific focus on Austria.
Our series of studies has caused a lively debate and has been discussed in both national and international media outlets like the Financial Times, Frankfurter Allgemeine Zeitung, tageszeitung, Deutschlandfunk, Süddeutsche Zeitung, El Vigia (Spain) and more.
Leaving the technical details aside, the bottom line of this series of studies is that TTIP can create positive welfare gains in the signatory countries, but may also have negative consequences for excluded countries, especially developing and emerging economies. The gains/losses in per capita welfare (measured as percentage changes in real wages per capita) are depicted in the map below.
Particularly, I have worked on a study for the Bertelsmann Foundation which looks into the employment effects of TTIP using the methodology explained in one of my working papers with Mario Larch. For the Bertelsmann study, click here. For the underlying methodology working paper, click here. Jointly with my co-authors, I have published a study in Economic Policy which investigates in depth the robustness of our results. You can read a non-technical abridged version of the Economic Policy paper here. For the (gated) full paper in Economic Policy, please click here.
I have also co-authored a study commissioned by the Austrian Ministry of Economics, Family and Youth on the effects of TTIP and other currently negotiated mega-regionals with a specific focus on Austria.
Our series of studies has caused a lively debate and has been discussed in both national and international media outlets like the Financial Times, Frankfurter Allgemeine Zeitung, tageszeitung, Deutschlandfunk, Süddeutsche Zeitung, El Vigia (Spain) and more.
Leaving the technical details aside, the bottom line of this series of studies is that TTIP can create positive welfare gains in the signatory countries, but may also have negative consequences for excluded countries, especially developing and emerging economies. The gains/losses in per capita welfare (measured as percentage changes in real wages per capita) are depicted in the map below.
This graph depicts the counterfactual percentage changes in welfare (expressed as real wages per capita) of TTIP. The numbers are the baseline scenario model simulations from Felbermayr, Larch, Heid, Yalcin (2015), "Macroeconomic potentials of transatlantic free trade: A high resolution perspective for Europe and the world", Economic Policy, 83(3), pp. 491-537.
For my talk at the Economic Policy Forum Roundtable in Cape Town in November 2014, I used the same model to analyze the impact of other potential regional megadeals and trade agreements like the Transpacific Partnership (TPP), the Regional Comprehensive Economic Partnership Agreement (RCEP) as well as the African Free Trade Zone (AFTZ, not covered in the Economic Policy piece), with a specific focus on South Africa, in more detail. You can find my presentation slides here.
