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The Welfare Cost of Autarky: Evidence from the Jeffersonian Trade Embargo, 1807-1809

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  • Douglas A. Irwin

Abstract

The United States came close to complete autarky in 1808 as a result of a self-imposed embargo on international shipping from December 1807 to March 1809. Monthly prices of exported and imported goods reveal the embargo's striking effect on commodity markets and allow a calculation of its welfare effects. A simple general equilibrium calculation suggests that the embargo cost about 8 percent of America's 1807 GNP, at a time when the trade share was about 13 percent (domestic exports and shipping earnings). The welfare cost was lower than the trade share because the embargo did not completely eliminate trade and because domestic producers successfully shifted production toward previously imported manufactured goods.

Suggested Citation

  • Douglas A. Irwin, 2001. "The Welfare Cost of Autarky: Evidence from the Jeffersonian Trade Embargo, 1807-1809," NBER Working Papers 8692, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:8692
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    References listed on IDEAS

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    1. Daniel M. Bernhofen & John C. Brown, 2004. "A Direct Test of the Theory of Comparative Advantage: The Case of Japan," Journal of Political Economy, University of Chicago Press, vol. 112(1), pages 48-67, February.
    2. Douglass North, 1960. "The United States Balance of Payments, 1790-1860," NBER Chapters, in: Trends in the American Economy in the Nineteenth Century, pages 573-628, National Bureau of Economic Research, Inc.
    3. The Conference on Research in Income and Wealth, 1960. "Trends in the American Economy in the Nineteenth Century," NBER Books, National Bureau of Economic Research, Inc, number unkn60-1, July.
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    Cited by:

    1. Daniel M. Bernhofen & John C. Brown, 2004. "A Direct Test of the Theory of Comparative Advantage: The Case of Japan," Journal of Political Economy, University of Chicago Press, vol. 112(1), pages 48-67, February.
    2. Ashley N. Coleman & William K. Hutchinson, 2005. "Trade Restrictions and Factor Prices: Slave Prices in Early Nineteenth Century US," Vanderbilt University Department of Economics Working Papers 0521, Vanderbilt University Department of Economics.
    3. Douglas A. Irwin & Joseph H. Davis, 2003. "Trade Disruptions and America's Early Industrialization," NBER Working Papers 9944, National Bureau of Economic Research, Inc.
    4. Arvind Panagariya, 2002. "Cost of Protection: Where Do We Stand?," American Economic Review, American Economic Association, vol. 92(2), pages 175-179, May.
    5. Ashley N. Coleman & William K. Hutchinson, 2006. "Determinants of Slave Prices: Louisiana, 1725 to 1820," Vanderbilt University Department of Economics Working Papers 0624, Vanderbilt University Department of Economics.
    6. Arvind Panagariya, 2003. "Alternative Approaches to Measuring the Cost of Protection," International Trade 0308002, University Library of Munich, Germany.
    7. Daniel M. Bernhofen & John C. Brown, 2005. "An Empirical Assessment of the Comparative Advantage Gains from Trade: Evidence from Japan," American Economic Review, American Economic Association, vol. 95(1), pages 208-225, March.

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    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services

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