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The Structure of Tariffs and Long-Term Growth

Nathan Nunn and Daniel Trefler

Working Papers from eSocialSciences

Abstract: We show that the ‘skill-bias’ of a country’s tariff structure is positively correlated with long-term per capita GDP growth. Testing for causal mechanisms, we find evidence consistent with the existence of real benefits from tariffs focused in skill-intensive industries. However, this only accounts for a quarter of the total correlation between skill-biased tariffs and growth. Turning to alternative explanations, we extend the standard Grossman-Helpman ‘protection-for-sale’ model and show how the skill-bias of tariffs can reflect the extent of domestic rent-seeking activities in the economy. We provide evidence that the remaining variation is explained by this endogeneity.[Working Paper No.]

Keywords: International trade; Tariffs; Political economy of protection; Economic growth. (search for similar items in EconPapers)
Date: 2010-06
New Economics Papers: this item is included in nep-fdg and nep-int
Note: Institutional Papers
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Citations: View citations in EconPapers (35)

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