A Theory of Managed Trade

Bagwell, Kyle; Staiger, Robert W.

doi:10.3386/w2756

Cited by 187 publications

(243 citation statements)

References 13 publications

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“…This evidence on the empirical relevance of the WTO and economic incentives for trade policy formation is therefore directly related to Broda, Limão, and Weinstein (2008) and Bagwell and Staiger (2011). For temporary trade barriers explicitly, Bown and Crowley (forthcoming) also provide evidence from more disaggregated, industry-level data for the United States that economic incentives shape antidumping and safeguard policy use and thus US participation in cooperative, self-enforcing trade agreements such as the WTO, an idea first formalized theoretically by Bagwell and Staiger (1990). 4 In terms of our specific results, after controlling for this relationship between WTO disciplines over trade policy and TTBs, our evidence confirms an important counter-cyclical relationship between macroeconomic shocks and import protection over the period 1995-2010.…”

Section: Introductionmentioning

confidence: 99%

Emerging economies, trade policy, and macroeconomic shocks

Bown

Crowley

2014

Journal of Development Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis paper estimates the impact of macroeconomic shocks on the trade policies of thirteen major emerging economies over 1989-2010; by 2010, these WTO member countries collectively accounted for 21 percent of world merchandise imports and 22 percent of world GDP. We examine determinants of carefully constructed, bilateral measures of new import protection imposed at the extensive margin. New import restrictions on products arise through the temporary trade barriers (TTBs) -antidumping, safeguards, and countervailing duties -that have become some of the most important time-varying trade policies in use. Our approach explicitly addresses changes to the institutional environment facing these emerging economies as they joined the WTO and promised to restrain other trade policies by keeping applied import tariffs below specified maximum levels. After controlling for this phenomenon, bilateral real exchange rate fluctuations, and potential differences across exchange rate regimes, we find general evidence of a counter-cyclical relationship between macroeconomic shocks and new import protection through TTBs. Furthermore, for the subset of major G20 emerging economies, the trade policy responsiveness coinciding with the onset of the WTO in 1995 through 2008 suggests a significant change relative to the pre-WTO period; i.e., import protection through these policy instruments became more countercyclical over time. Finally, we document evidence on potential changes to the channels through which macroeconomic shocks affect emerging economy new import protection coinciding with the timing of the Great Recession. JEL No. F13

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Section: Introductionmentioning

confidence: 99%

Emerging economies, trade policy, and macroeconomic shocks

Bown

Crowley

2014

Journal of Development Economics

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“…The political economy theories that account for unilateralism include Coates and Ludema (2001), Krishna and Mitra (2008), and very recently Ludema, Mayda and Mishra (2010) 8 The self-enforcing liberalisation model was first explained in modern terms by Dixit (1987) and Jensen and Thursby (1984); Bagwell and Staiger (1990) extended the model and brought it to the attention of the broad…”

Section: Literature Reviewmentioning

confidence: 99%

Unilateral Tariff Liberalisation

Baldwin

2010

The International Economy

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“…Export or import subsidies would not make sense, because both lead to a deterioration in the terms of trade. Following Bagwell and Staiger (1990), a trade policy aimed at exploiting the terms of trade should be based on the potential trade volume, and thus on the difference between Indian and RoW availability, rather than on RoW price. Although the simple rules are not designed to take into account the motivation for terms-of-trade manipulation, trade interventions are not negligible when price volatility is unweighted (see Table 5, first column).…”

Section: Storage By Private Stock Holdersmentioning

confidence: 99%

Managing food price volatility in a large open country: the case of wheat in India

2016

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India has pursued an active food security policy for many years using a combination of trade policy interventions, public distribution of food staples, and assistance to farmers through minimum support prices defended by public stocks. This policy has been quite successful in stabilizing staple food prices, but at a high cost, and with potential risks of unmanageable stock accumulation. Based on a rational expectations storage model representing the Indian wheat market and its relation to the rest of the world, we analyse the cost and welfare implications of this policy and unpack the contribution of its different elements. To analyse alternative policies, we assume that social welfare includes an objective of price stabilization and assess optimal policies corresponding to this objective. We consider fully optimal policies under commitment as well as optimal simple rules and show that adopting simple rules can achieve most of the gains from fully optimal policies. JEL classification: F13, O13, Q11, Q17, Q18.

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A Theory of Managed Trade

Cited by 187 publications

References 13 publications

Emerging economies, trade policy, and macroeconomic shocks

Emerging economies, trade policy, and macroeconomic shocks

Unilateral Tariff Liberalisation

Managing food price volatility in a large open country: the case of wheat in India

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