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Tariffs and income: A time series analysis for 24 countries

Author

Listed:
  • Lampe, Markus

    (Department of Economic History and Institutions)

  • Sharp, Paul

    () (Department of Business and Economics)

Abstract

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 pre- and 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.

Suggested Citation

  • Lampe, Markus & Sharp, Paul, 2012. "Tariffs and income: A time series analysis for 24 countries," Discussion Papers of Business and Economics 17/2012, University of Southern Denmark, Department of Business and Economics.
  • Handle: RePEc:hhs:sdueko:2012_017
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    References listed on IDEAS

    as
    1. Peter Llyod, 2007. "100 Years of Tariff Protection in Australia," Department of Economics - Working Papers Series 1023, The University of Melbourne.
    2. World Bank, 2008. "World Development Indicators 2008," World Bank Publications, The World Bank, number 11855.
    3. Tena Junguito, Antonio, 2007. "New series of the Spanish foreign sector, 1850-2000," IFCS - Working Papers in Economic History.WH wp07-14, Universidad Carlos III de Madrid. Instituto Figuerola.
    4. José Jofre & Rolf Lüders & Gert Wagner, "undated". "Economía Chilena 1810-1995. Cuentas Fiscales," Documentos de Trabajo 188, Instituto de Economia. Pontificia Universidad Católica de Chile..
    5. repec:wbk:wbpubs:28241 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Giovanni Federico & Paul Sharp & Antonio Tena-Junguito, 2017. "Openness and growth in a historical perspective: a VECM approach," Working Papers 0118, European Historical Economics Society (EHES).
    2. Léo CHARLES, 2017. "A new empirical test of the infant-industry argument : the case of Switzerland protectionism during the 19th century," Cahiers du GREThA 2017-11, Groupe de Recherche en Economie Théorique et Appliquée.
    3. Samuel Standaert & Stijn Ronsse & Benjamin Vandermarliere, 2016. "Historical trade integration: globalization and the distance puzzle in the long twentieth century," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 10(2), pages 225-250, May.
    4. Toke Aidt & Peter Jensen, 2013. "Democratization and the size of government: evidence from the long 19th century," Public Choice, Springer, vol. 157(3), pages 511-542, December.
    5. Mitchener, Kris James & Wandschneider, Kirsten, 2015. "Capital controls and recovery from the financial crisis of the 1930s," Journal of International Economics, Elsevier, vol. 95(2), pages 188-201.
    6. Vincent Bignon & Cecilia Garcia-Peñalosa, 2016. "Protectionism and the Education-Fertility Trade-off in Late 19th Century France," AMSE Working Papers 1604, Aix-Marseille School of Economics, Marseille, France, revised Jan 2016.
    7. Peter H. Bent, 2018. "Recovery from Financial Crises in Peripheral Economies, 1870-1913," CEH Discussion Papers 07, Centre for Economic History, Research School of Economics, Australian National University.

    More about this item

    Keywords

    Tariff/growth relationship; protectionism; trade liberalization; cointegrated VAR;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General

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