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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 percent. 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 percent (ceteris paribus), although the combination of specific duties and deflation further raised the effective tariff and reduced imports an additional 8-10 percent. A counter-factual simulation suggests that nearly a quarter of the observed 40 percent decline in imports can be attributed to the rise in the effective tariff, (i.e., Smoot-Hawley plus deflation).

Suggested Citation

  • Douglas A. Irwin, 1996. "The Smoot-Hawley Tariff: A Quantitative Assessment," NBER Working Papers 5509, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:5509
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Boffa, Mauro & Olarreaga, Marcelo, 2012. "Protectionism during the crisis: Tit-for-tat or chicken-games?," Economics Letters, Elsevier, vol. 117(3), pages 746-749.
    2. Jonathan Eaton & Samuel Kortum & Brent Neiman & John Romalis, 2016. "Trade and the Global Recession," American Economic Review, American Economic Association, vol. 106(11), pages 3401-3438, November.
    3. Petra Moser & Alessandra Voena, 2012. "Compulsory Licensing: Evidence from the Trading with the Enemy Act," American Economic Review, American Economic Association, vol. 102(1), pages 396-427, February.
    4. Hillebrand Evan E, 2010. "Deglobalization Scenarios: Who Wins? Who Loses?," Global Economy Journal, De Gruyter, vol. 10(2), pages 1-21, May.
    5. Kevin Hjortshøj O'Rourke, 2017. "Two Great Trade Collapses: The Intewar Period & Great Recession Compared," Oxford University Economic and Social History Series _159, Economics Group, Nuffield College, University of Oxford.
    6. Irwin, Douglas A. & Kroszner, Randall S., 1996. "Log-rolling and economic interests in the passage of the Smoot-Hawley tariff," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 45(1), pages 173-200, December.
    7. Hillebrand Evan E & Lewer Joshua J. & Zagardo Janice Turtora, 2011. "Backtracking from Globalization," Global Economy Journal, De Gruyter, vol. 10(4), pages 1-19, January.
    8. Kevin Hjortshøj O'Rourke, 2017. "Two Great Trade Collapses: The Interwar Period & Great Recession Compared," Oxford University Economic and Social History Series _159, University of Oxford, Department of Economics.
    9. Bown, Chad P. & Crowley, Meredith A, 2016. "The Empirical Landscape of Trade Policy," CEPR Discussion Papers 11216, C.E.P.R. Discussion Papers.
    10. Richard G. Harris & Peter E. Robertson, 2009. "Dynamic Gains and Market Access Insurance: Another Look at the Australia-US Free Trade Agreement," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 42(4), pages 435-452.
    11. repec:eee:dyncon:v:81:y:2017:i:c:p:50-64 is not listed on IDEAS
    12. Cristian Spiridon, 2014. "International Trade During The Crisis. Determinants," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 6(2), pages 156-164, July.
    13. Douglas A. Irwin, 1996. "Changes in U.S. Tariffs: Prices or Policies?," NBER Working Papers 5665, National Bureau of Economic Research, Inc.
    14. William Hynes & David S. Jacks & Kevin H. O'rourke, 2012. "Commodity market disintegration in the interwar period," European Review of Economic History, Oxford University Press, vol. 16(2), pages 119-143, May.
    15. Campbell, Douglas L. & Chentsov, Aleksandr, 2017. "Breaking Badly: The Currency Union Effect on Trade," MPRA Paper 79973, University Library of Munich, Germany.
    16. Bouët, Antoine & Laborde Debucquet, David, 2017. "US trade wars with emerging countries in the 21st century: Make America and Its partners lose again," IFPRI discussion papers 1669, International Food Policy Research Institute (IFPRI).
    17. Bown, Chad P., 2014. "Trade policy instruments over time," Policy Research Working Paper Series 6757, The World Bank.
    18. Eric Bond & Mario Crucini & Joel Rodrigue & Tristan Potter, 2013. "Misallocation and Productivity Effects of the Smoot-Hawley Tariff," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 120-134, January.

    More about this item

    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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