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Tariffs and income : a time series analysis for 24 countries

  • Markus Lampe

    ()

  • Paul Sharp

    ()

We argue for a new approach to examining the relationship between tariffs and growth. We demonstrate that more can be learned from time series analyses of the experience of individual countries rather than the usual panel data approach, which imposes a causal relation and presents an average coefficient for all countries. Tentative initial results using simple two variable cointegrated VAR models suggest considerable heterogeneity in the experiences of the countries we look at. For most, however, there was a negative relationship between tariffs and levels of income for both the preand post-Second World War periods. However, in the second half of the twentieth century, the causality ran from income to tariffs: i.e. countries simply liberalized as they got richer. Policy decisions based on the usual panel approach might thus be very inappropriate for individual countries

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Paper provided by Universidad Carlos III, Instituto Figuerola de Historia y Ciencias Sociales in its series Working Papers in Economic History with number wp12-08.

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Date of creation: Oct 2012
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Handle: RePEc:cte:whrepe:wp12-08
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  1. repec:cte:whrepe:wp07-14 is not listed on IDEAS
  2. Peter Llyod, 2007. "100 Years of Tariff Protection in Australia," Department of Economics - Working Papers Series 1023, The University of Melbourne.
  3. José Jofre & Rolf Lüders & Gert Wagner, . "Economía Chilena 1810-1995. Cuentas Fiscales," Documentos de Trabajo 188, Instituto de Economia. Pontificia Universidad Católica de Chile..
  4. World Bank, 2008. "World Development Indicators 2008," World Bank Publications, The World Bank, number 11855, December.
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