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Trade Restrictiveness and Deadweight Losses from U.S. Tariffs, 1859-1961

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  • Douglas A. Irwin

Abstract

This paper calculates the Anderson-Neary (2005) trade restrictiveness index (TRI) for the United States using nearly a century of data. The results show that the standard import-weighted average tariff understates the TRI, defined as the uniform tariff that yields the same welfare loss as the existing tariff structure, by about 75 percent. The static deadweight welfare loss from the U.S. tariff structure is about one percent of GDP after the Civil War, but falls almost continuously thereafter to less than one-tenth of one percent of GDP by the early 1960s. On average, import duties resulted in a welfare loss of 40 cents for every dollar of revenue generated, slightly higher than contemporary estimates of the marginal welfare cost of taxation.

Suggested Citation

  • Douglas A. Irwin, 2007. "Trade Restrictiveness and Deadweight Losses from U.S. Tariffs, 1859-1961," NBER Working Papers 13450, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:13450
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    References listed on IDEAS

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    3. Nuno Limão & Giovanni Maggi, 2018. "Uncertainty and Trade Agreements," World Scientific Book Chapters, in: Policy Externalities and International Trade Agreements, chapter 3, pages 47-88, World Scientific Publishing Co. Pte. Ltd..

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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • N71 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: Pre-1913
    • N72 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: 1913-

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