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Emerging economies, trade policy, and macroeconomic shocks

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  • Bown, Chad P.
  • Crowley, Meredith A.

Abstract

This paper estimates the impact of aggregate fluctuations on the time-varying trade policies of thirteen major emerging economies over 1989–2010; by 2010, these WTO member countries collectively accounted for 21% of world merchandise imports and 22% of world GDP. We examine determinants of carefully constructed, bilateral measures of new import restrictions on products arising through the temporary trade barrier (TTB) policies of antidumping, safeguards, and countervailing duties. We find evidence of a counter-cyclical relationship between macroeconomic shocks and new TTB import restrictions as well as an important role for fluctuations in bilateral real exchange rates. Furthermore, the trade policy responsiveness coinciding with WTO establishment in 1995 suggests a significant change relative to the pre-WTO period; i.e., new import restrictions became more counter-cyclical and sensitive to real exchange rate shocks over time. Finally, we also present results that explicitly address changes to the institutional environment facing these emerging economies as they joined the WTO and adopted disciplines to restrain their application of other trade policies such as applied import tariffs.

Suggested Citation

  • Bown, Chad P. & Crowley, Meredith A., 2014. "Emerging economies, trade policy, and macroeconomic shocks," Journal of Development Economics, Elsevier, vol. 111(C), pages 261-273.
  • Handle: RePEc:eee:deveco:v:111:y:2014:i:c:p:261-273
    DOI: 10.1016/j.jdeveco.2014.05.001
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    References listed on IDEAS

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    Cited by:

    1. Kyle Bagwell & Chad P. Bown & Robert W. Staiger, 2016. "Is the WTO Passé?," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1125-1231, December.
    2. Bown, Chad P. & Crowley, Meredith A, 2016. "The Empirical Landscape of Trade Policy," CEPR Discussion Papers 11216, C.E.P.R. Discussion Papers.
    3. MUKUNOKI Hiroshi, 2017. "Does Trade Liberalization Promote Antidumping Protection? A theoretical analysis," Discussion papers 17031, Research Institute of Economy, Trade and Industry (RIETI).
    4. Chad P. Bown & Patricia Tovar, 2016. "Preferential Liberalization, Antidumping, and Safeguards: Stumbling Block Evidence from MERCOSUR," Economics and Politics, Wiley Blackwell, vol. 28(3), pages 262-294, November.
    5. Yi Liu & Jun Deng, 2016. "Antidumping under International Fragmentation: Evidence from China," Review of Development Economics, Wiley Blackwell, vol. 20(1), pages 306-316, February.
    6. Chad P. Bown, 2014. "Trade Policy Flexibilities and Turkey: Tariffs, Anti-dumping, Safeguards and WTO Dispute Settlement," The World Economy, Wiley Blackwell, vol. 37(2), pages 193-218, February.
    7. Agnès Bénassy-Quéré & Matthieu Bussière & Pauline Wibaux, 2018. "Trade and currency weapons," Working Papers 2018-08, CEPII research center.
    8. Bown, Chad P., 2014. "Trade policy instruments over time," Policy Research Working Paper Series 6757, The World Bank.
    9. repec:taf:applec:v:48:y:2016:i:43:p:4083-4097 is not listed on IDEAS
    10. Georgios Georgiadis & Johannes Gräb, 2016. "Growth, Real Exchange Rates and Trade Protectionism since the Financial Crisis," Review of International Economics, Wiley Blackwell, vol. 24(5), pages 1050-1080, November.
    11. Crowley, M., 2018. "Understanding the challenges to the world trading system," Cambridge Working Papers in Economics 1825, Faculty of Economics, University of Cambridge.
    12. Bown, Chad P., 2012. "Emerging economies and the emergence of south-south protectionism," Policy Research Working Paper Series 6162, The World Bank.
    13. Lake, James & Linask, Maia K., 2016. "Could tariffs be pro-cyclical?," Journal of International Economics, Elsevier, vol. 103(C), pages 124-146.
    14. James C. Hartigan, 2016. "In or Out? Standards, Discretion, Compliance and the WTO," The World Economy, Wiley Blackwell, vol. 39(6), pages 738-754, June.
    15. Tobias D. Ketterer, 2016. "EU Anti-dumping and Tariff Cuts: Trade Policy Substitution?," The World Economy, Wiley Blackwell, vol. 39(5), pages 576-596, May.
    16. repec:fgv:epgrbe:v:71:y:2017:i:4:a:65699 is not listed on IDEAS
    17. Ning Meng & Chris Milner & Huasheng Song, 2016. "Differences in the determinants and targeting of antidumping: China and India compared," Applied Economics, Taylor & Francis Journals, vol. 48(43), pages 4083-4097, September.

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