Protectionism during the crisis: Tic-for-tac or chicken-games?
AbstractDuring the recent financial crisis many countries resorted to protectionist measures to try to boost demand for domestically-produced goods. In this paper we explore the extent to which the adoption of protectionist measures led to retaliation by other countries undermining the increase in demand. We found no evidence of retaliation. On the contrary, there is strong evidence of chicken-games being played. Indeed, the probability of a protectionist measure being imposed on a trading partner’s export bundle is significantly smaller when the partner imposes a protectionist measure on home exports.
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Bibliographic InfoPaper provided by Département des Sciences Économiques, Université de Genève in its series Research Papers by the Department of Economics, University of Geneva with number 12034.
Length: 7 pages
Date of creation: Mar 2012
Date of revision:
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Trade Retaliation; Chicken-games; Financial Crisis.;
Other versions of this item:
- Boffa, Mauro & Olarreaga, Marcelo, 2012. "Protectionism during the crisis: Tit-for-tat or chicken-games?," Economics Letters, Elsevier, vol. 117(3), pages 746-749.
- Boffa, Mauro & Olarreaga, Marcelo, 2012. "Protectionism during the crisis: Tit-for-tat or chicken games?," CEPR Discussion Papers 9119, C.E.P.R. Discussion Papers.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-27 (All new papers)
- NEP-GTH-2012-10-27 (Game Theory)
- NEP-INT-2012-10-27 (International Trade)
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