Protectionism Isn't Counter-Cyclic (anymore)

Andrew K. Rose

NBER Working Paper No. 18062
Issued in May 2012
NBER Program(s):Economic Fluctuations and Growth, International Finance and Macroeconomics, International Trade and Investment

Conventional wisdom holds that protectionism is counter-cyclic; tariffs, quotas and the like grow during recessions. While that may have been a valid description of the data before the Second World War, it is now inaccurate. In the post-war era, protectionism has not actually moved counter-cyclically. Tariffs and non-tariff barriers simply do not rise systematically during cyclic downturns. I document this new stylized fact with a panel of data covering over 60 countries and 30 years, using eighteen measures of protectionism and seven of business cycles. I also provide some hints as to why protectionism is no longer counter-cyclic.

A non-technical summary of this paper is available in the September 2012 NBER Digest.  You can sign up to receive the NBER Digest by email.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w18062

Published: “Protectionism isn’t Counter-Cyclic (anymore)”, NBER WP 18,062, CEPR DP 8937, Economic Policy 2013.

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