Working Paper: CEPR ID: DP8937
Authors: Andrew K. Rose
Abstract: Conventional wisdom holds that protectionism is counter-cyclic; tariffs, quotas and the like grow during recessions. While that may have been a valid description of the data before the Second World War, it is no longer accurate. In the post-war era, protectionism has not actually moved counter-cyclically. Tariffs and non-tariff barriers do not systematically rise during cyclic downturns; if anything, they tend to fall. I document this new stylized fact with a wide panel of data, using a variety of measures of protectionism and business cycles. I also provide some hints as to why protectionism is no longer counter-cyclic.
Keywords: barrier; business cycle; data; empirical; international; panel; policy; recession; tariff; trade
JEL Codes: E32; F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Protectionism (F52) | Business Cycles (E32) |
| Higher Unemployment (J64) | Lower Tariffs (F19) |
| Lower Tariffs (F19) | Business Cycles (E32) |
| Higher Unemployment (J64) | Protectionism (F52) |
| Tariffs (F19) | Business Cycles (E32) |