The debate on trade and currency wars has reemerged since the Global Financial Crisis. We study the two forms of noncooperative policies within a single framework. First, we compare the elasticity of trade flows to import tariffs and to the real exchange rate, based on product-level data for 110 countries over the 1989–2013 period. We find that a 1% depreciation of the importer's currency reduces imports by around 0.5% in current dollar, whereas an increase in import tariffs by 1 percentage point reduces imports by around 1.4%. Hence, the two instruments are not equivalent. Second, we build a stylized short-term macroeconomic model where the government aims at internal and external balance. We find that, in this setting, monetary policy is more stabilizing for the economy than trade policy. One implication is that, in normal times, a country will more likely react to a trade “aggression” through monetary easing rather than through a tariff increase. However, both instruments are (imperfect) substitutes in the short term, when only one of them is available.

中文翻译：

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贸易和货币武器

自全球金融危机以来，关于贸易和货币战争的辩论重新出现。我们在一个框架内研究了两种形式的非合作政策。首先，我们根据 1989 年至 2013 年期间 110 个国家的产品级别数据，比较了贸易流量对进口关税和实际汇率的弹性。我们发现，以当前美元计算，进口国货币贬值 1% 会使进口减少约 0.5%，而进口关税提高 1 个百分点会使进口减少约 1.4%。因此，这两种工具并不等同。其次，我们建立了一个程式化的短期宏观经济模型，政府以内部和外部平衡为目标。我们发现，在这种情况下，货币政策比贸易政策更能稳定经济。一种含义是，在正常时期，一个国家更有可能通过货币宽松而不是通过增加关税来应对贸易“侵略”。然而，这两种工具在短期内都是（不完美的）替代品，当只有其中一种可用时。