Youssef A. Benasser

Youssef A. Benasser

Economist, Teacher, Mentor, currently @ Reed College. Researching trade policy irregularities. Passionate about pedagogy, labor organizing and oriental music.

Working Papers

China’s Aid and Trade Diplomacy: A Zero-Sum Game?

China’s active economic diplomacy has revived debates on new mercantilism as a form of government intervention in shaping a globalized world. In this paper, I investigate one of the main grievances against these policies: their ability to divert existing trade relationships, thus creating a zero-sum competition environment. Using data on development aid, official loans, trade and investment deals, and focusing on Africa, I quantify the trade creation and diversion effects of China’s economic diplomacy tools. I find that official finance, and chiefly development aid, positively affects exports to China and third-party countries, especially in the manufacturing sector. A similar effect is observed with trade agreements. Of the considered tools, none displays strong diversion effects. When it comes to international trade, China’s aid and trade diplomacy is not a zero-sum game.

Recommended citation: Ait Benasser, Youssef. (2022). "China’s Aid and Trade Diplomacy: A Zero-Sum Game?".

Measuring Trade Policy Uncertainty and Its Impact on Financial Market Volatility

The weakening multilateral trade policy framework and the pursuit of protectionist agendas have reduced the predictability of trade policy in recent years. This paper investigates the impact of trade policy uncertainty (TPU) on stock market volatility. In doing so, it pro- poses a new forward-looking index to measure public perceptions of TPU. In-sample results reveal that markets do not respond to TPU shocks with increased volatility. Out-of-sample analysis indicates that TPU does not have predictive power for market volatility and that accounting for it in asset allocation decisions does not improve investors’ utility. These results align well with theoretical predictions of behavioral responses to uncertainty. They also significantly deviate from the existing empirical literature on the volatility-impact of other sources of policy uncertainty. I discuss possible reasons that explain this new result.

Recommended citation: Ait Benasser, Youssef. (2021). "Measuring Trade Policy Uncertainty and Its Impact on Financial Market Volatility".

Evaluating The Symmetry of Trade Policy : Evidence From Liberalization Reversals

Is trade policy symmetric? Using a dataset of trade agreements from 1986 to 2016, I identify 126 instances of trade liberalization reversals where standing agreements are revoked and barriers to trade are reintroduced. I study the impact of these reversals on import volumes to reveal whether trade flows responses to positive and negative liberalization shocks are symmetric. Some of weak evidence of positive trade policy asymmetry emerges : trade volumes appear to respond more to favorable shocks. However, the hypothesis of perfect policy symmetry cannot be rejected at credible confidence levels.

Recommended citation: Ait Benasser, Youssef (2020). "Evaluating The Symmetry of Trade Policy: Evidence From Liberalization Reversals" Working Paper.