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Are trade restrictions counter-cyclical? Evidence from a new aggregate measure

Julia Estefania-Flores, Davide Furceri, Swarnali Hannan, Jonathan Ostry and Andrew Rose
Authors registered in the RePEc Author Service: Julia Estefania Flores

Journal of Policy Modeling, 2023, vol. 45, issue 4, 745-767

Abstract: We present a new Measure of Aggregate Trade Restrictions (MATR) using data from the IMF’s Annual Report on Exchange Arrangements and Exchange Restrictions. MATR is strongly correlated with existing measures of trade restrictiveness but more comprehensive in terms of country and time coverage. Our measure is available for an unbalanced sample of up to 157 countries during 1949–2019. We use our new MATR to re-examine how trade restrictiveness varies with the business cycle. Our results confirm that trade restrictions are typically a-cyclical but there is an important difference across income groups: aggregate trade restrictions are a-cyclical in advanced economies but are counter-cyclical in EMDEs, especially in response to increases in unemployment.

Keywords: Empirical; Protectionism; Tariffs; Non-tariff barriers; Cycle (search for similar items in EconPapers)
JEL-codes: F13 F15 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1016/j.jpolmod.2023.04.008

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