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Self-enforcing trade agreements : evidence from time-varying trade policy
 
Author:Bown, Chad P.; Crowley, Meredith A.; Collection Title:Policy Research working paper ; no. WPS 5223
Country:World; Date Stored:2012/06/15
Document Date:2010/03/01Document Type:Policy Research Working Paper
Language:EnglishMajor Sector:Industry and trade
Rel. Proj ID:1W-Market Access Research -- -- P111070;Region:The World Region
Report Number:WPS5223Sub Sectors:Other domestic and international trade
SubTopics:Currencies and Exchange Rates; Economic Theory & Research; Free Trade; Trade Policy; International Trade and Trade RulesTF No/Name:TF091541-MARKET ACCESS RESEARCH
Volume No:1 of 1  

Summary: The Bagwell and Staiger (1990) theory of cooperative trade agreements predicts new tariffs (i) increase with imports, (ii) increase with the inverse of the sum of the import demand and export supply elasticities, and (iii) decrease with the variance of imports. The authors find US import policy during 1997-2006 to be consistent with this theory. A one standard deviation increase in import growth, the inverse of the sum of the import demand and export supply elasticity, and the standard deviation of import growth changes the probability that the US imposes an antidumping tariff by 35 percent, by 88 percent, and by -76 percent, respectively.

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