The Structure of Tariffs and Long-Term Growth

Nathan Nunn and Daniel Trefler

Scholarly Articles from Harvard University Department of Economics

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.

Date: 2010
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Citations: View citations in EconPapers (35)

Published in American Economic Journal: Macroeconomics

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Journal Article: The Structure of Tariffs and Long-Term Growth (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hrv:faseco:11986329

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