Is there a short-run case for protectionism? Trade policy and the business cycle

No 1717, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: Recently, the world economy has seen its greatest down turn since World War II. Although not as bad as during the Great Depression, there was still a worrisome increase in protectionist measures, in an attempt to mitigate the economic downturn. Protectionism can have many different faces. It can come in the form of Buy-American clauses of stimulus packages, as an increase in trade barriers or tariffs, or as an increase in export subsidies. In this paper, we show that none of these measures constitutes an effective response to economic downturns. Although Buy-American clauses and export subsidies stimulate output in the short run, they are less effective than general government spending impulses. Raising tariffs or trade barriers even decreases output.

Keywords: Business cycle policy; Protectionism; Buy-American; Tariffs; Export subsidies (search for similar items in EconPapers)
JEL-codes: E13 E60 F11 F12 F13 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/49386/1/664090702.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1717

Access Statistics for this paper

More papers in Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().