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Australian and American tariffs policies: do they rock or tango?

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  • Cassette, Aurélie
  • Farvaque, Etienne

Abstract

This paper disentangles between two hypotheses on the determinants of Australia's and the US' average tariffs levels. Relying on historical data that covers a century (1904 to 2005), it is first shown that a break in the series occurs in 1947, forcing to separate the data into two sub-periods (before and after the 1947 break). The results permit to distinguish a "rock" and a "tango" regime. The first designates the period where one country (the US) has a stronger influence on the other, while the second indicates that, after 1947, stronger reciprocal inter-relations have to be taken into account.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 13507.

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Date of creation: 19 Feb 2009
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Handle: RePEc:pra:mprapa:13507

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Keywords: Australia; United States; Trade Policy; Tariffs;

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  1. James E. Anderson & J. Peter Neary, 2005. "Measuring the Restrictiveness of International Trade Policy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012200, January.
  2. Grossman, Gene & Helpman, Elhanan, 1993. "Protection for Sale," CEPR Discussion Papers 827, C.E.P.R. Discussion Papers.
  3. Denis Kwiatkowski & Peter C.B. Phillips & Peter Schmidt, 1991. "Testing the Null Hypothesis of Stationarity Against the Alternative of a Unit Root: How Sure Are We That Economic Time Series Have a Unit Root?," Cowles Foundation Discussion Papers 979, Cowles Foundation for Research in Economics, Yale University.
  4. Kim, Soyoung & Roubini, Nouriel, 2000. "Exchange rate anomalies in the industrial countries: A solution with a structural VAR approach," Journal of Monetary Economics, Elsevier, vol. 45(3), pages 561-586, June.
  5. Prema-Chandra Athukorala & Satish Chand, 2007. "Tariff-Growth Nexus in the Australian Economy, 1870-2002: Is there a Paradox?," Departmental Working Papers 2007-08, The Australian National University, Arndt-Corden Department of Economics.
  6. Gregory, A.W. & Hansen, B.E., 1992. "Residual-Based Tests for Cointegration in Models with Regime Shifts," RCER Working Papers 335, University of Rochester - Center for Economic Research (RCER).
  7. Elbourne, Adam & de Haan, Jakob, 2006. "Financial structure and monetary policy transmission in transition countries," Journal of Comparative Economics, Elsevier, vol. 34(1), pages 1-23, March.
  8. Douglas A. Irwin, 2002. "Interpreting the Tariff–Growth Correlation of the Late 19th Century," American Economic Review, American Economic Association, vol. 92(2), pages 165-169, May.
  9. Peter Lloyd, 2008. "100 Years Of Tariff Protection In Australia," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 48(2), pages 99-145, 07.
  10. Michael Hoffman, 2009. "What explains attitudes across US trade policies?," Public Choice, Springer, vol. 138(3), pages 447-460, March.
  11. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
  12. Gardner, Grant W & Kimbrough, Kent P, 1989. "The Behavior of U.S. Tariff Rates," American Economic Review, American Economic Association, vol. 79(1), pages 211-18, March.
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