Our present work tries to explain how the recently
recommended supply chain policies of the US can impact the global supply chain.
We employ the GTAP model to analyze the possible short-term effects of those
policies. We aggregated different regions and sectors to get a simplified view
of our analysis. The major conclusion is that even if the newly recommended
policies have the potential to increase the GDP growth rate, there might be a
possibility of worsening the balance of trade account due to the risk of
exchange rate appreciation. However, we only consider the US supply chain
policies, and the policy approaches and responses of other countries to tackle
the negative effects are still unknown. This analysis implies that the US heavy
industry may be highly benefited from the recommended policies, but how much
this effect may be positive, significant, and long-lasting is still unknown as
our analysis majorly focuses on the short-term impacts. To study the long-term
effects, we have to visualize our analysis through a dynamic general
equilibrium model.
Citation:
Nandi, A., & Narayanan, B. (2021). An economywide analysis of potential impact of the new US supply chain policies. ASERC Journal of Socio-Economic Studies, 4(2), 116-125. DOI:10.30546/2663-7251.2021.4.2.116