Trade barriers and the collapse of world trade during the great depression

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Abstract

Using panel data estimates of export and import equations for 17 countries in the interwar period, this paper estimates the effects of increasing tariff and nontariff trade barriers on worldwide trade over the period 1929 to 1932. The estimates suggest that real world trade contracted approximately 14% because of declining income, 8% as a result of discretionary increases in tariff rates, 5% owing to deflation-induced tariff increases, and a further 6% because of the imposition of nontariff barriers. Allowing for feedback effects from trade barriers on income and prices, discretionary impositions of trade barriers contributed about the same to the trade collapse as the diminishing nominal income.

Original languageEnglish
Pages (from-to)848-868
Number of pages21
JournalSouthern Economic Journal
Volume67
Issue number4
DOIs
Publication statusPublished - 1 Jan 2001

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