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Trade Restrictiveness and Deadweight Losses from US Tariffs

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  • Douglas A. Irwin

Abstract

This paper calculates a trade restrictiveness index, i.e., the uniform tariff that yields the same welfare loss as an existing tariff structure, for nearly a century of US data. The results show that the average tariff understates the TRI by about 75 percent. The static deadweight loss from US tariffs is about 1 percent of GDP after the Civil War, but falls almost continuously thereafter to less than one-tenth of 1 percent of GDP. Import duties produced an average welfare loss of 40 cents for every dollar of revenue, slightly higher than contemporary estimates of the marginal cost of taxation. (JEL F13, N71, N72)

Suggested Citation

  • Douglas A. Irwin, 2010. "Trade Restrictiveness and Deadweight Losses from US Tariffs," American Economic Journal: Economic Policy, American Economic Association, vol. 2(3), pages 111-133, August.
  • Handle: RePEc:aea:aejpol:v:2:y:2010:i:3:p:111-33
    Note: DOI: 10.1257/pol.2.3.111
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.3.111
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    File URL: http://www.aeaweb.org/aej/pol/data/2009-0002_data.zip
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    References listed on IDEAS

    as
    1. Hugh M. Arce & Kenneth A. Reinert, 1994. "Aggregation and the Welfare Analysis of US Tariffs," Journal of Economic Studies, Emerald Group Publishing, vol. 21(6), pages 26-30, October.
    2. 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.
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    Citations

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    Cited by:

    1. Kym Anderson, 2016. "Contributions Of The Gatt/Wto To Global Economic Welfare: Empirical Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 30(1), pages 56-92, February.
    2. Kym Anderson & Johanna Croser, 2011. "Novel indicators of the trade and welfare effects of agricultural distortions in OECD countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(2), pages 269-302, June.
    3. Chad P. Bown & Douglas A. Irwin, 2015. "The GATT's Starting Point: Tariff Levels circa 1947," NBER Working Papers 21782, National Bureau of Economic Research, Inc.
    4. repec:bla:worlde:v:40:y:2017:i:2:p:424-438 is not listed on IDEAS
    5. repec:bla:ausecr:v:50:y:2017:i:3:p:278-293 is not listed on IDEAS
    6. Trevor Tombe, 2010. "The Missing Food Problem: How Low Agricultural Imports Contribute to International Income and Productivity Differences," Working Papers tecipa-416, University of Toronto, Department of Economics.
    7. Meissner, Christopher M., 2014. "Growth from Globalization? A View from the Very Long Run," Handbook of Economic Growth,in: Handbook of Economic Growth, edition 1, volume 2, chapter 8, pages 1033-1069 Elsevier.
    8. Chen, Bo & Ma, Hong & Xu, Yuan, 2014. "Measuring China’s trade liberalization: A generalized measure of trade restrictiveness index," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 994-1006.

    More about this item

    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
    • N72 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: 1913-

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