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Measuring the TFP Costs of Barriers to Trade

Pedro Ferreira and Alberto Trejos

No 644, 2006 Meeting Papers from Society for Economic Dynamics

Abstract: We perform development decompositions measuring the effect of trade restrictions on TFP and labor productivity. An economy with two tradable and non-storable intermediate goods, used in the production of a non-tradable final good, is assumed. The solution of the static trade and factor allocation problem generates a mapping between factor endowments and final output, which is then used in our exercises. For middle income economies with high tariff rates, the effects of trade restrictions are significant; in some cases, enough to attribute to protectionism one third of their TFP disadvantage. The impact on GDP per worker is also relevant

Keywords: cross-country TFP differences; protectionism (search for similar items in EconPapers)
JEL-codes: F1 O11 O47 (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed006:644

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More papers in 2006 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
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