DP8937 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, trade|
|Programme Areas:||International Macroeconomics, International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=8937|
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.