Discussion paper

DP2044 The Mercantilist Index of Trade Policy

This paper develops and characterizes an index of trade policy restrictiveness defined as the uniform tariff equivalent which maintains the same volume of trade as a given set of tariffs, quotas, and domestic taxes and subsidies. We relate this volume-equivalent index to the Trade Restrictiveness Index, a welfare-equivalent measure, and relate changes in both indexes to changes in the generalized mean and variance of the tariff schedule. Applications to international cross-section and time-series comparisons of trade policy show that the new index frequently gives a very different picture than do standard indexes.


Neary, P and J Anderson (1998), ‘DP2044 The Mercantilist Index of Trade Policy‘, CEPR Discussion Paper No. 2044. CEPR Press, Paris & London. https://cepr.org/publications/dp2044