Discussion Paper Details

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Title: Protectionism Isn?t Counter-Cyclic (anymore)

Author(s): Andrew K Rose

Publication Date: April 2012

Keyword(s): barrier, business cycle, data, empirical, international, panel, policy, recession, tariff and trade

Programme Area(s): International Macroeconomics and International Trade and Regional Economics

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.

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Bibliographic Reference

Rose, A. 2012. 'Protectionism Isn?t Counter-Cyclic (anymore)'. London, Centre for Economic Policy Research.