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Measuring the TFP Costs of Barriers to Trade

Author

Listed:
  • Pedro Cavalcanti Ferreira

    (EPGE Getulio Vargas)

  • Alberto Trejos

Abstract

We perform development decompositions measuring the effect of trade restrictions on TFP and labor productivity. An economy with two tradable and non-storable intermediate goods, used in the production of a non-tradable final good, is assumed. The solution of the static trade and factor allocation problem generates a mapping between factor endowments and final output, which is then used in our exercises. For middle income economies with high tariff rates, the effects of trade restrictions are significant; in some cases, enough to attribute to protectionism one third of their TFP disadvantage. The impact on GDP per worker is also relevant

Suggested Citation

  • Pedro Cavalcanti Ferreira & Alberto Trejos, 2006. "Measuring the TFP Costs of Barriers to Trade," 2006 Meeting Papers 644, Society for Economic Dynamics.
    • Handle: RePEc:red:sed006:644
    as

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    More about this item

    Keywords

    cross-country TFP differences; protectionism;

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • F1 - International Economics - - Trade

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