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Marla Ripoll
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Publisher: Journals Gateway
The Review of Economics and Statistics (2006) 88 (4): 625–640.
Published: 01 November 2006
Abstract
View articletitled, Tariffs and Growth: An Empirical Exploration of Contingent Relationships
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for article titled, Tariffs and Growth: An Empirical Exploration of Contingent Relationships
A large body of empirical research indicates that countries with low policy-induced trade barriers tend to enjoy rapid growth, ceteris paribus. In contrast, alternative theoretical models suggest that the relationship between trade barriers and growth may be contingent on the level of development. Employing a direct trade-barrier measure—ad valorem tariff rates—we find evidence of such a contingency: the marginal effect of tariffs on growth is declining in the level of per capita income. Moreover, evidence of a negative relationship between tariffs and growth is apparent only among the world's rich countries.