Working Paper: NBER ID: w18062
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 now inaccurate. In the post-war era, protectionism has not actually moved counter-cyclically. Tariffs and non-tariff barriers simply do not rise systematically during cyclic downturns. I document this new stylized fact with a panel of data covering over 60 countries and 30 years, using eighteen measures of protectionism and seven of business cycles. I also provide some hints as to why protectionism is no longer counter-cyclic.
Keywords: No keywords provided
JEL Codes: E32; F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| economic downturns (F44) | initiation of trade disputes under the WTO (F13) |
| real GDP above trend levels (P24) | number of WTO disputes initiated (F13) |
| high unemployment rates (J64) | high tariffs (F19) |
| protectionism (F52) | business cycles (E32) |
| protectionism (F52) | countercyclicality (E32) |