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The Welfare Cost of Autarky: Evidence from the Jeffersonian Trade Embargo, 1807-09

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  • Douglas A. Irwin

Abstract

The United States came close to complete autarky in 1808 as a result of a self-imposed embargo on international shipping from December 1807 to March 1809. Monthly prices of exported and imported goods reveal the embargo's striking effect on commodity markets and allow a calculation of its welfare effects. A simple general-equilibrium calculation suggests that the embargo cost about 5 percent of America's 1807 GNP, at a time when the trade share was about 13 percent (domestic exports and shipping earnings). The welfare cost was lower than the trade share because the embargo did not completely eliminate trade and because domestic producers successfully shifted production toward previously imported manufactured goods. Copyright Blackwell Publishing Ltd 2005.

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  • Douglas A. Irwin, 2005. "The Welfare Cost of Autarky: Evidence from the Jeffersonian Trade Embargo, 1807-09," Review of International Economics, Wiley Blackwell, vol. 13(4), pages 631-645, September.
  • Handle: RePEc:bla:reviec:v:13:y:2005:i:4:p:631-645
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    Cited by:

    1. Matthieu Crozet & Julian Hinz, 2016. "Collateral Damage: The impact of the Russia sanctions on sanctioning countries’ exports," Working Papers 2016-16, CEPII research center.
    2. David S. Jacks & Kevin H. O'Rourke & Jeffrey G. Williamson, 2011. "Commodity Price Volatility and World Market Integration since 1700," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 800-813, August.
    3. Costinot, Arnaud & Rodríguez-Clare, Andrés, 2014. "Trade Theory with Numbers: Quantifying the Consequences of Globalization," Handbook of International Economics, Elsevier.
    4. Réka Juhász, 2014. "Temporary Protection and Technology Adoption: Evidence from the Napoleonic Blockade," CEP Discussion Papers dp1322, Centre for Economic Performance, LSE.
    5. Hinz, Julian, 2017. "The cost of sanctions: Estimating lost trade with gravity," Kiel Working Papers 2093, Kiel Institute for the World Economy (IfW).
    6. Dimitrios Panagiotou & Azzeddine M. Azzam, 2010. "Trade Bans, Imperfect Competition, and Welfare: BSE and the U.S. Beef Industry," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(1), pages 109-129, March.
    7. Etkes, Haggay & Zimring, Assaf, 2015. "When trade stops: Lessons from the Gaza blockade 2007–2010," Journal of International Economics, Elsevier, vol. 95(1), pages 16-27.
    8. Juhász, Réka, 2014. "Temporary protection and technology adoption: evidence from the Napoleonic blockade," LSE Research Online Documents on Economics 60697, London School of Economics and Political Science, LSE Library.
    9. Assaf Zimring, 2013. "Gains from Trade: Lessons from the Gaza Blockade 2007-2010," Discussion Papers 12-024, Stanford Institute for Economic Policy Research.
    10. Glaser, Darrell J. & Rahman, Ahmed S., 2016. "Ex Tridenti Mercatus? Sea-power and maritime trade in the age of globalization," Journal of International Economics, Elsevier, vol. 100(C), pages 95-111.
    11. Crozet, Matthieu & Hinz, Julian, 2016. "Friendly fire - the trade impact of the Russia sanctions and counter-sanctions," Kiel Working Papers 2059, Kiel Institute for the World Economy (IfW).

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