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American Economic Review Vol. 103 No. 2 2013

Self-Enforcing Trade Agreements: Evidence from Time-Varying Trade Policy

Chad P. Bown1; Meredith A. Crowley2

1 The World Bank, Development Research Group, Trade and International Integration, 1818 H Street NW, Mailstop: MC3-303, Washington, DC 20433. · 2 Federal Reserve Bank of Chicago, Economic Research, 11th floor, 230 S. LaSalle Street, Chicago, IL 60604.

Abstract

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. We 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.

DOI
10.1257/aer.103.2.1071
Volume
103
Issue
2
Pages
1071-1090
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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