Protectionism during the crisis: Tit-for-tat or chicken games?

Marcelo Olarreaga and Mauro Boffa

No 9119, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: During the recent financial crisis many countries resorted to protectionist measures to try to boost demand for domestically-produced goods. In this paper we explore the extent to which the adoption of protectionist measures led to retaliation by other countries undermining the increase in demand. We found no evidence of retaliation. On the contrary, there is strong evidence of chicken-games being played. Indeed, the probability of a protectionist measure being imposed on a trading partner's export bundle is significantly smaller when the partner imposes a protectionist measure on home exports.

Keywords: Chicken-games; Financial crisis; Trade retaliation (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Date: 2012-09
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (9)

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Journal Article: Protectionism during the crisis: Tit-for-tat or chicken-games? (2012)
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