The Slide to Protectionism in the Great Depression: Who Succumbed and Why?

51 Pages Posted: 21 Jul 2009 Last revised: 6 Feb 2010

See all articles by Barry Eichengreen

Barry Eichengreen

University of California, Berkeley; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Douglas A. Irwin

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

Date Written: July 2009

Abstract

The Great Depression was marked by a severe outbreak of protectionist trade policies. But contrary to the presumption that all countries scrambled to raise trade barriers, there was substantial cross-country variation in the movement to protectionism. Specifically, countries that remained on the gold standard resorted to tariffs, import quotas, and exchange controls to a greater extent than countries that went off gold. Gold standard countries chose to maintain their fixed exchange rate and reduce spending on imports rather than allow their currency to depreciate. Trade protection in the 1930s was less an instance of special interest politics than second-best macroeconomic policy when monetary and fiscal policies were constrained.

Suggested Citation

Eichengreen, Barry and Irwin, Douglas A., The Slide to Protectionism in the Great Depression: Who Succumbed and Why? (July 2009). NBER Working Paper No. w15142. Available at SSRN: https://ssrn.com/abstract=1434657

Barry Eichengreen (Contact Author)

University of California, Berkeley ( email )

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National Bureau of Economic Research (NBER)

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Centre for Economic Policy Research (CEPR)

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Douglas A. Irwin

Dartmouth College - Department of Economics ( email )

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603-646-2942 (Phone)
603-646-2122 (Fax)

National Bureau of Economic Research (NBER)

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