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The Structure of Tariffs and Long-Term Growth

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  • Nathan Nunn

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  • Daniel Trefler

    ()

Abstract

We show that the ‘skill-bias’ of a country’s tariff structure is positively correlated with long-term per capita GDP growth. Testing for causal mechanisms, we find evidence consistent with the existence of real benefits from tariffs focused in skill-intensive industries. However, this only accounts for a quarter of the total correlation between skill-biased tariffs and growth. Turning to alternative explanations, we extend the standard Grossman-Helpman ‘protection-for-sale’ model and show how the skill-bias of tariffs can reflect the extent of domestic rent-seeking activities in the economy. We provide evidence that the remaining variation is explained by this endogeneity.[Working Paper No.]

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Bibliographic Info

Paper provided by eSocialSciences in its series Working Papers with number id:2614.

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Date of creation: Jun 2010
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Handle: RePEc:ess:wpaper:id:2614

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Keywords: International trade; Tariffs; Political economy of protection; Economic growth.;

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Cited by:
  1. Tena-Junguito, Antonio & Lampe, Markus & Fernandes, Felipe Tâmega, 2012. "How Much Trade Liberalization Was There in the World Before and After Cobden-Chevalier?," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 72(03), pages 708-740, September.
  2. Copeland, Brian R., 2012. "International trade and green growth," Policy Research Working Paper Series, The World Bank 6235, The World Bank.
  3. Hallegatte, Stephane & Fay, Marianne & Vogt-Schilb, Adrien, 2013. "Green industrial policies : when and how," Policy Research Working Paper Series, The World Bank 6677, The World Bank.
  4. Jeffrey G. Williamson, 2010. "When, Where, and Why? Early Industrialization in the Poor Periphery 1870-1940," NBER Working Papers, National Bureau of Economic Research, Inc 16344, National Bureau of Economic Research, Inc.

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