IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

When tariff cuts don't boost import variety

Listed author(s):
  • Shalah M. Mostashari
Registered author(s):

    Sustained growth of international trade since World War II has coincided with an array of trade agreements and gradual reduction of tariffs. How much declining tariffs boosted commerce and the impact of liberalized trade rules on a country's standard of living have been a central focus of trade-policy economic research. The welfare effects of trade liberalization can be quite different when viewed from either of two perspectives--from the intensive margin, where liberalizing countries import more of the same goods, or from the extensive margin, where countries import a greater variety of items. If a trade policy's impact on the extensive margin is significant, the benefits of liberalization, or the costs of protection, are potentially much higher. ; The distinction between intensive and extensive margins is quite important since countries' exports vary across industries and among trading partners, with commercial patterns changing over time. The range of goods countries trade tended to increase substantially following implementation of some preferential trading agreements that eliminated barriers. However, the actual contribution of lower tariffs may be, in fact, quite modest relative to growth in the variety of exports constituting the extensive margin. ; The range of goods exported to the U.S. has increased substantially, with little evidence that tariff liberalization is a primary cause. While these findings may be specific to the U.S. and the small tariff decreases in recent years, other factors related to productivity and economic growth appear to be more important in explaining increased export variety.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Article provided by Federal Reserve Bank of Dallas in its journal Economic Letter.

    Volume (Year): 5 (2010)
    Issue (Month): dec ()

    in new window

    Handle: RePEc:fip:feddel:y:2010:i:dec:n:v.5no.13
    Contact details of provider: Web page:

    More information through EDIRC

    Order Information: Email:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:fip:feddel:y:2010:i:dec:n:v.5no.13. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Amy Chapman)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.