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The Nixon shock after forty years: the import surcharge revisited

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  • IRWIN, DOUGLAS A.

Abstract

On 15 August 1971, President Richard Nixon closed the gold window and imposed a 10% surcharge on all dutiable imports in an effort to force other countries to revalue their currencies against the dollar. The import surcharge was lifted four months later after the Smithsonian agreement led to new exchange rate parities. This paper examines the political, economic, and legal issues surrounding this use of trade sanctions to achieve exchange rate adjustments.

Suggested Citation

  • Irwin, Douglas A., 2013. "The Nixon shock after forty years: the import surcharge revisited," World Trade Review, Cambridge University Press, vol. 12(1), pages 29-56, January.
    • Handle: RePEc:cup:wotrrv:v:12:y:2013:i:01:p:29-56_00
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    1. repec:rnp:ppaper:mak12 is not listed on IDEAS
    2. Assaf Razin, 2021. "Globalization And Global Crises: Israel And The Rest Of The World," Israel Economic Review, Bank of Israel, vol. 19(1), pages 103-134.
    3. Bown, Chad & Crowley, Meredith A., 2016. "The Empirical Landscape of Trade Policy," CEPR Discussion Papers 11216, Centre for Economic Policy Research.
    4. Auboin, Marc & Ruta, Michele, 2013. "The relationship between exchange rates and international trade: a literature review," World Trade Review, Cambridge University Press, vol. 12(3), pages 577-605, July.
    5. Campbell, Douglas L., 2020. "Relative Prices and Hysteresis: Evidence from US Manufacturing," European Economic Review, Elsevier, vol. 129(C).
    6. G.-Fivos Sargentis & Panos Defteraios & Nikos D. Lagaros & Nikοs Mamassis, 2022. "Values and Costs in History: A Case Study on Estimating the Cost of Hadrianic Aqueduct’s Construction," World, MDPI, vol. 3(2), pages 1-27, April.
    7. Christopher Erceg & Andrea Prestipino & Andrea Raffo, 2018. "The Macroeconomic Effect of Trade Policy," 2018 Meeting Papers 221, Society for Economic Dynamics.
    8. G.-Fivos Sargentis & Demetris Koutsoyiannis, 2023. "The Function of Money in Water–Energy–Food and Land Nexus," Land, MDPI, vol. 12(3), pages 1-18, March.
    9. Douglas L. Campbell, 2013. "Relative Prices, Hysteresis, and the Decline of American Manufacturing," 2013 Papers pca584, Job Market Papers.
    10. Ahmed Mehedi Nizam, 2023. "An analysis of transnational transfer of wealth through cross-border financial transactions," SN Business & Economics, Springer, vol. 3(1), pages 1-31, January.
    11. Razin, Assaf, 2021. "Globalization and Global Crises: Rest of the World vs. Israel," CEPR Discussion Papers 15643, Centre for Economic Policy Research.
    12. Caldara, Dario & Iacoviello, Matteo & Molligo, Patrick & Prestipino, Andrea & Raffo, Andrea, 2020. "The economic effects of trade policy uncertainty," Journal of Monetary Economics, Elsevier, vol. 109(C), pages 38-59.
    13. Assaf Razin, 2020. "De-globalization: Driven by Global Crises?," NBER Working Papers 27929, National Bureau of Economic Research, Inc.
    14. Lukas Boer & Malte Rieth, 2024. "The Macroeconomic Consequences of Import Tariffs and Trade Policy Uncertainty," IMF Working Papers 2024/013, International Monetary Fund.
    15. James L. Butkiewicz & Scott Ohlmacher, 2021. "Ending Bretton Woods: evidence from the Nixon tapes," Economic History Review, Economic History Society, vol. 74(4), pages 922-945, November.
    16. Lawrence L. Kreicher & Robert N. McCauley, 2021. "Managing the Dollar Over Its Cycles," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 49(2), pages 143-158, June.
    17. Michael D. Bordo, 2020. "The Imbalances of the Bretton Woods System 1965 to 1973: U.S. Inflation, the Elephant in the Room," Open Economies Review, Springer, vol. 31(1), pages 195-211, February.
    18. Nizam, Ahmed Mehedi, 2021. "Redistribution of wealth through cross border financial transactions: A closer look," MPRA Paper 109374, University Library of Munich, Germany.
    19. Timm Betz & Andrew Kerner, 2016. "The influence of interest: Real US interest rates and bilateral investment treaties," The Review of International Organizations, Springer, vol. 11(4), pages 419-448, December.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-

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