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The Smoot-Hawley Tariff: A Quantitative Assessment

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  • Douglas A. Irwin

Abstract

In the two years after the imposition of the Smoot-Hawley tariff in June 1930, the volume of U.S. imports fell over 40%. To what extent can this collapse of trade be attributed to the tariff itself versus other factors such as declining income or foreign retaliation? Partial and general equilibrium assessments indicate that the Smoot-Hawley tariff itself reduced imports by 4-8% (ceteris paribus), although the combination of specific duties and deflation further raised the effective tariff and reduced imports an additional 8-10%. A counterfactual simulation suggests that nearly a quarter of the observed 40% decline in imports can be attributed to the rise in the effective tariff (i.e., Smoot-Hawley plus deflation). © 1998 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Suggested Citation

  • Douglas A. Irwin, 1998. "The Smoot-Hawley Tariff: A Quantitative Assessment," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 326-334, May.
  • Handle: RePEc:tpr:restat:v:80:y:1998:i:2:p:326-334
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    References listed on IDEAS

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    1. Crucini, Mario J. & Kahn, James, 1996. "Tariffs and aggregate economic activity: Lessons from the Great Depression," Journal of Monetary Economics, Elsevier, vol. 38(3), pages 427-467, December.
    2. Peter C. B. Phillips & Mico Loretan, 1991. "Estimating Long-run Economic Equilibria," Review of Economic Studies, Oxford University Press, vol. 58(3), pages 407-436.
    3. Clarida, Richard H, 1994. "Cointegration, Aggregate Consumption, and the Demand for Imports: A Structural Econometric Investigation," American Economic Review, American Economic Association, vol. 84(1), pages 298-308, March.
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    5. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550, March.
    6. Robert Archibald & David Feldman & Marc Hayford & Carl Pasurka, 2000. "Effective rates of protection and the Fordney-McCumber and Smoot-Hawley Tariff Acts: comment and revised estimates," Applied Economics, Taylor & Francis Journals, vol. 32(9), pages 1223-1226.
    7. Shiells, Clinton R, 1991. "Errors in Import-Demand Estimates Based upon Unit-Value Indexes," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 378-382, May.
    8. Robert E. Lipsey, 1963. "Price and Quantity Trends in the Foreign Trade of the United States," NBER Books, National Bureau of Economic Research, Inc, number lips63-1, May.
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    JEL classification:

    • N72 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: 1913-
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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