Tariffs and the Expansion of the American Pig Iron Industry, 1870-1940
AbstractThis study quantifies dynamic learning effects behind the tariff wall in the American pig iron industry in 1870-1940. First, we present new datasets to argue that imported and domestic pig iron were close substitutes. Next, we provide evidence for dynamic learning effects. Finally, we use the estimated learning rate to simulate the hypothetical free trade regime starting in 1870. Despite substantial learning at the early stage of development, free trade would have wiped out the domestic industry by 1881. This would be caused by unfavorable shocks on demand, input costs and transport costs.
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Bibliographic InfoPaper provided by Purdue University, Department of Economics in its series Purdue University Economics Working Papers with number 1214.
Length: 30 pages
Date of creation: Sep 2008
Date of revision:
Pig iron trade; protection; dynamic learning effects;
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- N71 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: Pre-1913
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