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The impact of the 1932 General Tariff: a difference-in-difference approach

Author

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  • Simon P. Lloyd

    (International DirectorateBank of England, London, UK)

  • Solomos Solomou

    (Faculty of Economics and PeterhouseUniversity of Cambridge, Cambridge, UK)

Abstract

We evaluate the effect of the 1932 British General Tariff on the output, labour productivity and employment growth of British industries. We provide a new disaggregated data set that matches industry-level Census of Production data with industry-specific tariff rates to accurately isolate treatment and control groups and estimate the effect of the General Tariff using difference-in-difference regressions. We evaluate a two-group comparison, between newly and non-newly protected industries, and a three-group comparison, between non-newly protected industries and newly protected industries further divided into those given a baseline 10% tariff rate and those given additional tariffs. In the two-group comparison, we identify a tariff effect that is large and statistically significant on output and productivity. In the three-group comparison, we show that the positive output and productivity effects of the tariff arise from the additional tariff protection, over and above the 10% level. These effects are observed over the periods 1930–1935 and 1930–1948, suggesting both short-run and medium-term effects on output and productivity of UK industries protected by the 1932 General Tariff.

Suggested Citation

  • Simon P. Lloyd & Solomos Solomou, 2020. "The impact of the 1932 General Tariff: a difference-in-difference approach," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 14(1), pages 41-60, January.
    • Handle: RePEc:afc:cliome:v:14:y:2020:i:1:p:41-60
    DOI: 10.1007/s11698-019-00184-z
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    References listed on IDEAS

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    More about this item

    Keywords

    Trade policy; General Tariff; Difference-in-difference;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • N64 - Economic History - - Manufacturing and Construction - - - Europe: 1913-

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