EconPapers    
Economics at your fingertips  
 

Protection and the Business Cycle

Kyle Bagwell and Robert Staiger ()

No 1130, Discussion Papers from Northwestern University, Center for Mathematical Studies in Economics and Management Science

Abstract: Empirical studies have repeatedly documented the countercyclical nature of trade barriers. In this paper, we propose a simple theoretical framework that is consistent with this and other empirical regularities in the relationship between protection and the business cycle. We examime the ability of countries to maintain efficiency-enhancing reciprocal trade agreements that control their temptation to resort to beggar-thy-neighbor policies, under the requirement that such agreements are self enforcing. We find theoretical supposr for countercyclical movements in protection levels, as the fast growth in trade volume that is associated with a boom phase facilitates the maintenance of more liberal trade policies than can be sustained during a recession phase in which growth is slow. However, we also find that acyclical increases in the level of trade volume give rise to protection, implying that whether rising imports are met with greater liberalization or increased protection depends on whether they are part of a cyclic upward trend in trade volume or an acyclical increase in import levels.

Date: 1995-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
http://www.kellogg.northwestern.edu/research/math/papers/1130.pdf main text (application/pdf)

Related works:
Journal Article: Protection and the Business Cycle (2003) Downloads
Working Paper: Protection and Business cycle (1995)
Working Paper: Protection and the Business Cycle (1995) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nwu:cmsems:1130

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Discussion Papers from Northwestern University, Center for Mathematical Studies in Economics and Management Science Center for Mathematical Studies in Economics and Management Science, Northwestern University, 580 Jacobs Center, 2001 Sheridan Road, Evanston, IL 60208-2014. Contact information at EDIRC.
Bibliographic data for series maintained by Fran Walker (). This e-mail address is bad, please contact .

 
Page updated 2020-01-17
Handle: RePEc:nwu:cmsems:1130