Working Paper: NBER ID: w8751
Authors: Douglas A. Irwin
Abstract: The positive correlation between import tariffs and economic growth across countries in the late nineteenth century suggests that tariffs may have played a causal role in promoting growth. This paper seeks to determine if high tariffs stimulated growth by shifting resources out of agriculture and into manufacturing. The most rapidly growing countries were indeed those that reduced the share of employment in agriculture. Tariffs in agricultural exporting (importing) countries may have promoted (retarded) this shift, although two high tariff, high growth, agricultural-exporting outliers (Argentina and Canada) experienced export-oriented growth and did not pursue import substitution policies. This raises the question of whether economic growth led to changes in the structure of employment rather than changes in employment leading to economic growth.
Keywords: No keywords provided
JEL Codes: F1; N7
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| High tariffs (F19) | Economic growth (O00) |
| High tariffs (F19) | Shift of resources from agriculture to manufacturing (O14) |
| Shift of resources from agriculture to manufacturing (O14) | Economic growth (O00) |
| Reduction in agricultural employment (J43) | Economic growth (O00) |
| Tariffs (F19) | Structural change in employment (J21) |
| Export-led growth (F43) | Economic growth (O00) |