The Structure of Tariffs and Long-Term Growth

Citation:

Nunn N, Trefler D. The Structure of Tariffs and Long-Term Growth. American Economic Journal: Macroeconomics. 2010; 2 (4) : 158-194.
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Abstract:

We show that the “skill bias” of a country’s tariff structure is positively correlated with long-term per capita GDP growth. Testing for causal mechanisms, we find evidence consistent with the existence of real benefits from tariffs focused in skill-intensive industries. However, this only accounts for a quarter of the total correlation between skill-biased tariffs and growth. Turning to alternative explanations we extend the standard Grossman-Helpman “protection-for-sale" model and show how the skill bias of tariffs can reflect the extent of domestic rent-seeking activities in the economy. We provide evidence that the remaining variation is explained by this endogeneity

Last updated on 09/29/2018