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Measuring international trade policy: a primer on trade restrictiveness indices

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  • Cletus C. Coughlin

Abstract

Measuring the overall restrictiveness of a country's international trade policies is important and, in fact, essential for estimating the effects of trade policies and for negotiations to reduce trade barriers. A good measure is also difficult to produce: Trade restrictiveness indices are constructed by combining the actual structure of trade restrictions, which is generally quite different across goods, into a single number. Under certain assumptions, this single number is the uniform tariff that would produce the same trade restrictiveness as the actual differentiated structure of restrictions. In this paper, the economic intuition underlying the construction of these indices is presented and estimates of these indices and the resulting insights are summarized.

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Bibliographic Info

Article provided by Federal Reserve Bank of St. Louis in its journal Review.

Volume (Year): (2010)
Issue (Month): Sep ()
Pages: 381-394

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Handle: RePEc:fip:fedlrv:y:2010:i:sep:p:381-394:n:v.92no.5

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Keywords: International trade ; Economic policy;

References

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  1. Mariana Spatareanu & Vlad Manole, 2009. "Trade openness and income ?a re-examination," LICOS Discussion Papers 24309, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  2. Anderson, James E. & Neary, J. Peter, 1992. "A new approach to evaluating trade policy," Policy Research Working Paper Series 1022, The World Bank.
  3. Hiau Looi Kee & Nicita, Alessandro & Olarreaga, Marcelo, 2004. "Import demand elasticities and trade distortions," Policy Research Working Paper Series 3452, The World Bank.
  4. Lloyd, Peter J. & Croser, Johanna L. & Anderson, Kym, 2009. "Global Distortions to Agricultural Markets: New Indicators of Trade and Welfare Impacts, 1955 to 2007," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 48049, Australian Agricultural and Resource Economics Society.
  5. James E. Anderson & J. Peter Neary, 2003. "The Mercantilist Index of Trade Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 627-649, 05.
  6. Anderson, James E & Neary, J Peter, 1992. "Trade Reform with Quotas, Partial Rent Retention, and Tariffs," Econometrica, Econometric Society, vol. 60(1), pages 57-76, January.
  7. James E Anderson & J Peter Neary, 2004. "Welfare versus Market Access - The Implications of Tariff Structure for Tariff Reform," Working Papers 200423, School Of Economics, University College Dublin.
  8. Bach, Christian F. & Martin, Will, 2001. "Would the right tariff aggregator for policy analysis please stand up?," Journal of Policy Modeling, Elsevier, vol. 23(6), pages 621-635, August.
  9. J Anderson & J.P. Neary, 1994. "Measuring the Restrictiveness of Trade Policy," CEP Discussion Papers dp0186, Centre for Economic Performance, LSE.
  10. James Anderson, 1995. "Trade Restrictiveness Benchmarks," Boston College Working Papers in Economics 290., Boston College Department of Economics.
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Cited by:
  1. International Monetary Fund, 2011. "Customs Administration Reform and Modernization in Anglophone Africa - Early 1990s to Mid-2010," IMF Working Papers 11/184, International Monetary Fund.
  2. Gheorghe Săvoiu & Vasile Dinu & Laurenţiu Tăchiciu, 2012. "Romania Foreign Trade in Global Recession, Revealed by the Extended Method of Exchange Rate Indicators," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(31), pages 173-194, February.

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