Trade Restrictiveness and Deadweight Losses from U.S. Tariffs, 1859-1961

45 Pages Posted: 28 Sep 2007 Last revised: 26 Nov 2007

See all articles by Douglas A. Irwin

Douglas A. Irwin

Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: September 2007

Abstract

This paper calculates the Anderson-Neary (2005) trade restrictiveness index (TRI) for the United States using nearly a century of data. The results show that the standard import-weighted average tariff understates the TRI, defined as the uniform tariff that yields the same welfare loss as the existing tariff structure, by about 75 percent. The static deadweight welfare loss from the U.S. tariff structure is about one percent of GDP after the Civil War, but falls almost continuously thereafter to less than one-tenth of one percent of GDP by the early 1960s. On average, import duties resulted in a welfare loss of 40 cents for every dollar of revenue generated, slightly higher than contemporary estimates of the marginal welfare cost of taxation.

Suggested Citation

Irwin, Douglas A., Trade Restrictiveness and Deadweight Losses from U.S. Tariffs, 1859-1961 (September 2007). NBER Working Paper No. w13450. Available at SSRN: https://ssrn.com/abstract=1017773

Douglas A. Irwin (Contact Author)

Dartmouth College - Department of Economics ( email )

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