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Protectionist Responses to the Crisis: Global Trends and Implications

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Author Info

  • Matthieu Bussière
  • Emilia Pérez‐Barreiro
  • Roland Straub
  • Daria Taglioni

Abstract

In this paper we take a systematic look at recent trends in global protectionism and at the potential implications of a protectionist backlash for economic growth, using results from the recent economic literature and new model simulations. We find that there has so far been a moderate increase in actual protectionist measures to restrict trade through tariff and non-tariff barriers. At the same time, evidence from surveys shows that public pressure for more economic protection has been mounting since the mid-2000s, and has possibly intensified since the start of the financial crisis. However, no World Trade Organization (WTO) member has retreated into widespread trade restrictions or protectionism to date. Our model-based simulations suggest that the impairment of the global flow of trade would hamper the recovery from the crisis, as well as the long-term growth potential of the global economy. At the same time, it is unlikely that protectionism would help to correct existing current account imbalances. Moreover, the countries implementing protectionist measures should expect a deterioration of their international competitiveness, which would further affect the potential for longer-term real GDP growth. JEL Classification: E22, E50

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Bibliographic Info

Article provided by Wiley Blackwell in its journal The World Economy.

Volume (Year): 34 (2011)
Issue (Month): (05)
Pages: 826-852

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Handle: RePEc:bla:worlde:v:34:y:2011:i::p:826-852

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References

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  1. Robert Kaufmann & Pavlos Karadeloglou & Filippo di Mauro, 2008. "Will oil prices decline over the long run?," Occasional Paper Series 98, European Central Bank.
  2. Thierry Bracke & Matthieu Bussière & Michael Fidora & Roland Straub, 2008. "A framework for assessing global imbalances," Occasional Paper Series 78, European Central Bank.
  3. Antoine Bouët & Yvan Decreux & Lionel Fontagné & Sébastien Jean & David Laborde, 2008. "Assessing applied protection across the world," Working Papers 26327, Institut National de la Recherche Agronomique, France.
  4. Magdalena Morgese Borys & Éva Katalin Polgár & Andrei Zlate, 2008. "Real convergence and the determinants of growth in EU candidate and potential candidate countries - a panel data approach," Occasional Paper Series 86, European Central Bank.
  5. Karim Barhoumi & Szilard Benk & Riccardo Cristadoro & Ard Den Reijer & Audrone Jakaitiene & Piotr Jelonek & António Rua & Gerhard Rünstler & Karsten Ruth & Christophe Van Nieuwenhuyze, 2008. "Short-term forecasting of GDP using large monthly datasets - a pseudo real-time forecast evaluation exercise," Occasional Paper Series 84, European Central Bank.
  6. Roland Beck & Michael Fidora, 2008. "The impact of sovereign wealth funds on global financial markets," Intereconomics: Review of European Economic Policy, Springer, vol. 43(6), pages 349-358, November.
  7. K. H. O'Rourke & R. Sinnott, 2001. "The Determinants of Individual Trade Policy Preferences: International Survey Evidence," Trinity Economics Papers 200110, Trinity College Dublin, Department of Economics.
  8. Cappiello, Lorenzo & Gérard, Bruno & Kadareja, Arjan & Manganelli, Simone, 2006. "Financial integration of new EU Member States," Working Paper Series 0683, European Central Bank.
  9. Sabine Herrmann & Adalbert Winkler, 2009. "Financial markets and the current account: emerging Europe versus emerging Asia," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 145(3), pages 531-550, October.
  10. Philippe Moutot & Alexander Jung & Francesco Paolo Mongelli, 2008. "The working of the eurosystem - monetary policy preparations and decision-making – selected issues," Occasional Paper Series 79, European Central Bank.
  11. Zbigniew Polanski & Adalbert Winkler, 2008. "Russia, EU enlargement and the euro," Occasional Paper Series 93, European Central Bank.
  12. Amelia Santos-Paulino & A. P. Thirlwall, 2004. "The impact of trade liberalisation on exports, imports and the balance of payments of developing countries," Economic Journal, Royal Economic Society, vol. 114(493), pages F50-F72, 02.
  13. Markus Baltzer & Lorenzo Cappiello & Roberto A. De Santis & Simone Manganelli, 2008. "Measuring financial integration in new EU member states," Occasional Paper Series 81, European Central Bank.
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Citations

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Cited by:
  1. Bown, Chad P. & Crowley, Meredith A., 2013. "Emerging economies, trade policy, and macroeconomic shocks," Policy Research Working Paper Series 6315, The World Bank.
  2. An IRC expert group of the ESCB, 2010. "Financial stability challenges in EU candidate countries - Financial systems in the aftermath of the global crisis," Occasional Paper Series 115, European Central Bank.
  3. Stolz, Stéphanie Marie & Wedow, Michael, 2010. "Extraordinary measures in extraordinary times: Public measures in support of the financial sector in the EU and the United States," Discussion Paper Series 1: Economic Studies 2010,13, Deutsche Bundesbank, Research Centre.
  4. repec:imf:imfwpa:11/139:99 is not listed on IDEAS
  5. Task Force of the Monetary Policy Committee of the ESCB, 2010. "Energy markets and the euro area macroeconomy," Occasional Paper Series 113, European Central Bank.
  6. Beirne, John & Dalitz, Lars & Ejsing, Jacob & Grothe, Magdalena & Manganelli, Simone & Monar, Fernando & Sahel, Benjamin & Sušec, Matjaž & Tapking, Jens & Vong, Tana, 2011. "The impact of the Eurosystem's covered bond purchase programme on the primary and secondary markets," Occasional Paper Series 122, European Central Bank.
  7. di Mauro, Filippo & Forster, Katrin & Lima, Ana, 2010. "The global downturn and its impact on euro area exports and competitiveness," Occasional Paper Series 119, European Central Bank.
  8. Sturm, Michael & Sauter, Nicolas, 2010. "The impact of the global financial turmoil and recession on Mediterranean countries’ economies," Occasional Paper Series 118, European Central Bank.
  9. repec:imf:imfwpa:11/139:9 is not listed on IDEAS
  10. Holm-Hadulla, Fédéric & Kamath, Kishore & Lamo, Ana & Pérez, Javier J. & Schuknecht, Ludger, 2010. "Public wages in the euro area - towards securing stability and competitiveness," Occasional Paper Series 112, European Central Bank.
  11. Chauvin, Nicolas Depetris & Ramos, Maria Priscila, 2013. "The welfare effect of the new wave of protectionism: The case of Argentina," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151626, Agricultural and Applied Economics Association.
  12. Bodea, Cristina & Huemer, Stefan, 2010. "Dancing together at arm’s length? – The interaction of central banks with governments in the G7," Occasional Paper Series 120, European Central Bank.
  13. Bricongne, Jean-Charles & Fontagné, Lionel & Gaulier, Guillaume & Taglioni, Daria & Vicard, Vincent, 2010. "Exports and sectoral financial dependence: evidence on French firms during the great global crisis," Working Paper Series 1227, European Central Bank.
  14. Hess, Patrick, 2010. "Securities clearing and settlement in China: markets, infrastructures and policy-making," Occasional Paper Series 116, European Central Bank.
  15. Gardó, Sándor & Martin, Reiner, 2010. "The impact of the global economic and financial crisis on central, eastern and south-eastern Europe: A stock-taking exercise," Occasional Paper Series 114, European Central Bank.
  16. Bradley J. McDonald & Christian Henn, 2011. "Protectionist Responses to the Crisis," IMF Working Papers 11/139, International Monetary Fund.
  17. Rob Gregory & Christian Henn & Brad Mcdonald & Mika Saito, 2010. "Trade And The Crisis: Protect Or Recover," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 1(02), pages 165-181.

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