Global
Linkages
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In the News

On her April 1st interview with Time Magazine, GLL Director Prof. Kalemli-Ozcan argued that the Liberation Day tariffs, if end up being large, can start a global trade war, hurting American consumers and businesses at the end the most.

How do different risk premia for currency, policy and country interact? Which one matters for investors? These are key questions given increased US policy uncertainty. Our director Prof. Kalemli-Ozcn explains in an FT op-ed.

Our director Prof. Kalemli-Ozcan and several other economists shared their views on the potential impact of tariffs on the US economy recession risk in a recent Newsweek interview.

The whiplash from the Donald Trump administration’s on-again, off-again tariff policy is leading to a lot of uncertainty, argues our director Professor Şebnem Kalemli-Özcan, affecting both wall street and main street.

In an FT interview, our director Professor Şebnem Kalemli-Özcan argued that U.S. unemployment could rise as businesses make cuts in the face of higher costs borne from tariffs and higher wages resulting from changes in immigration policy.

In an interview with the FT, our Director Prof. Şebnem Kalemli-Özcan explained the potential stagflationary impact of the tariffs proposed by the Trump administration.

In a Q&A, our director Professor Şebnem Kalemli-Özcan discussed how the new presidential administration’s planned tariffs could potentially impact the U.S. economy.

Three of our GLL projects have been cited in the 2025 Economic Report of the President. The papers make the following points: the key drivers of pandemic era inflation is robust demand coinciding with negative supply shocks; global capital flows and global technology ownership is linked; foreign direct investment needs financial markets to be beneficial for growth.

On her April 1st interview with Time Magazine, GLL Director Prof. Kalemli-Ozcan argued that the Liberation Day tariffs, if end up being large, can start a global trade war, hurting American consumers and businesses at the end the most.

How do different risk premia for currency, policy and country interact? Which one matters for investors? These are key questions given increased US policy uncertainty. Our director Prof. Kalemli-Ozcn explains in an FT op-ed.

Our director Prof. Kalemli-Ozcan and several other economists shared their views on the potential impact of tariffs on the US economy recession risk in a recent Newsweek interview.

The whiplash from the Donald Trump administration’s on-again, off-again tariff policy is leading to a lot of uncertainty, argues our director Professor Şebnem Kalemli-Özcan, affecting both wall street and main street.

In an FT interview, our director Professor Şebnem Kalemli-Özcan argued that U.S. unemployment could rise as businesses make cuts in the face of higher costs borne from tariffs and higher wages resulting from changes in immigration policy.

In an interview with the FT, our Director Prof. Şebnem Kalemli-Özcan explained the potential stagflationary impact of the tariffs proposed by the Trump administration.

In a Q&A, our director Professor Şebnem Kalemli-Özcan discussed how the new presidential administration’s planned tariffs could potentially impact the U.S. economy.

Three of our GLL projects have been cited in the 2025 Economic Report of the President. The papers make the following points: the key drivers of pandemic era inflation is robust demand coinciding with negative supply shocks; global capital flows and global technology ownership is linked; foreign direct investment needs financial markets to be beneficial for growth.

Recent Research Highlights

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April 2025
How disruptive is Trump's trade war to globalization?
We develop a new framework to study how trade policy and central bank actions interact in a world connected through trade and finance. The model captures how tariffs and other trade barriers affect inflation, employment, output, and the exchange rate—particularly when countries are linked through complex input–output networks. Our findings show that tariffs operate as both supply and demand shocks, generating broad ripple effects across the global economy. The magnitude and direction of these effects depend critically on how central banks respond. Using the model, we replicate key features of the U.S. experience during the 2018 tariff hikes, including slower growth, rising inflation, and a stronger U.S. dollar. We apply our framework to ""Liberation Day"" tariffs as well. Importantly, we also find that even tariff threats—announcements that are later reversed—can negatively affect the economy.
March 2025
Global Vaccinations: The least cost-highest return solution to economic contractions during the pandemic.
We developed a global economic model to understand how disruptions in one part of the world—such as low vaccination rates in emerging economies during the COVID-19 pandemic—can affect advanced economies. When developing countries were forced to impose lockdowns due to uncontrolled infections, the global economy experienced ripple effects: shortages of critical inputs, higher import prices, and weaker external demand for exports from advanced economies. Our model quantifies the economic costs of these disruptions for wealthier countries and shows that the magnitude of the impact depends heavily on how interconnected industries are through global supply chains. The key insight is clear: investing in vaccine access for lower-income countries is not just a humanitarian imperative—it is also a sound economic strategy for advanced economies seeking to safeguard their own growth and stability.
Conditionally accepted RESTUD
https://www.ft.com/content/53c668bc-1066-4d8c-8c8d-5d29ba34a06e?desktop=true&segmentId=d8d3e364-5197-20eb-17cf-2437841d178a#myft:notification:instant-email:content
https://www.ft.com/content/a14399fc-49c0-4e29-8354-54f9a0b9a895?desktop=true&segmentId=d8d3e364-5197-20eb-17cf-2437841d178a#myft:notification:instant-email:content
https://www.nytimes.com/2021/01/23/business/coronavirus-vaccines-global-economy.html?referringSource=articleShare
https://www.wsj.com/articles/faltering-covid-19-vaccine-drive-in-developing-world-risks-prolonging-pandemic-11613557801
https://www.theguardian.com/world/2021/jan/25/hoarding-covid-vaccines-could-cost-wealthy-countries-45tn
https://www.bbc.co.uk/programmes/p095609x
https://www.bloomberg.com/news/articles/2021-02-05/the-9-2-trillion-price-tag-for-failing-to-vaccinate-the-world
https://www.newyorker.com/news/q-and-a/why-rich-countries-should-subsidize-vaccination-around-the-world
https://www.weforum.org/agenda/2021/02/the-4-trillion-economic-cost-of-not-vaccinating-the-entire-world/
https://www.technologyreview.com/2021/02/13/1018259/why-a-failure-to-vaccinate-the-world-will-put-us-all-at-risk
https://theconversation.com/the-4-trillion-economic-cost-of-not-vaccinating-the-entire-world-154786
https://storypartnersdc.com/economic-recovery-dependent-on-vaccinating-the-world/
February 2025
What are the drivers of 2021 Inflation?
We built a global economic model to understand what caused inflation during and after the pandemic. It shows that both country-specific and worldwide shocks—like supply disruptions and shifts in demand—spread through global trade and production networks. Even if labor shortages happened unevenly, they pushed up costs across many sectors, leading to broad-based inflation. Countries with flexible exchange rates were better at handling these shocks, limiting inflation spillovers. Overall, it was the mix of sector-specific supply problems and global demand surges that best explains why inflation rose in so many places at once.
https://www.bloomberg.com/news/articles/2022-07-24/fed-to-inflict-more-pain-on-economy-as-it-readies-big-rate-hike?srnd=premium&sref=d16KMguM
https://www.ft.com/content/da283616-c30b-4274-9278-4f82ef562243
https://www.nytimes.com/2022/08/24/business/inflation-demand-prices-us.html
https://www.wsj.com/articles/ny-fed-ties-most-of-inflation-surge-to-supply-problems-11661364051#:~:text=A%20notable%20amount%20of%20the,Bank%20of%20New%20York%20said
https://www.marketplace.org/2022/08/25/what-was-the-main-driver-of-inflation-from-2019-21/
April 2024
How do FED hikes transmit to the rest of the world?
Unlike in the past, the recent U.S. interest rate hikes in 2022–2023 haven’t caused a financial crisis in emerging markets. Historically, these countries were hit hard when the Federal Reserve raised rates, as investors pulled out and borrowing costs soared. But this time is different. Emerging markets have improved their monetary policies and reduced their reliance on U.S. dollar debt, making them more resilient. As a result, there’s been less capital flight and smaller increases in risk premiums than in previous episodes. These results imply that the way FED hikes transmit to the rest of the world is through higher risk premiums and countries can reduce their own premia with increased monetary policy credibility.
Published in AEA PP
https://www.ft.com/content/3c321f16-91e2-4d86-90b2-22b16352428d
July 2022
Can trade increase when supply chains are blocked? If so what are the implications for inflation and output?
We study why inflation rose in the Euro Area during the COVID-19 pandemic and how it compared to what happened in the U.S. between 2020 and 2021. We find that the shift in consumer spending—from services to goods—played a big role in driving inflation, especially because global supply chains amplified the effects. Labor shortages in specific sectors made the problem worse, leading to higher inflation than if the economy had only faced changes in demand. Interestingly, global supply disruptions and foreign shocks mattered more for inflation in Europe than domestic spending did. Also, even though demand for goods was strong, trade didn’t respond as much as it did during the 2008–09 crisis, partly due to supply bottlenecks. The overall takeaway is that inflation would have been much lower without these supply-side issues, even if governments had tried to stimulate demand.
https://www.ecb.europa.eu/pub/pdf/sintra/ecb.forumcentbank202206~a6bc0541ca.en.pdf
https://www.ft.com/content/da283616-c30b-4274-9278-4f82ef562243
https://www.nytimes.com/2022/08/24/business/inflation-demand-prices-us.html
https://www.wsj.com/articles/ny-fed-ties-most-of-inflation-surge-to-supply-problems-11661364051#:~:text=A%20notable%20amount%20of%20the,Bank%20of%20New%20York%20said
https://www.marketplace.org/2022/08/25/what-was-the-main-driver-of-inflation-from-2019-21/

Global Linkages Lab hosts a diverse range of raw and derived datasets on global trade and financial linkages, at a granular level, enabling to ignite path breaking research on issues such as global networks, tariffs and sanctions, trade and inflation, domestic and global productivity, misallocation of global capital, financing of green transition, dominance of the dollar, the global impact of U.S. fiscal, monetary and trade policies, geoeconomics and global fragmentation amidst significant global challenges. One of our primary goals is to provide a valuable public service, by sharing our data and hosting teaching seminars, other events and large conferences.