Protectionist Responses to the Crisis: Global Trends and Implications

54 Pages Posted: 21 Feb 2011

See all articles by Matthieu Bussière

Matthieu Bussière

Banque de France

Emilia Pérez-Barreiro

European Central Bank (ECB)

Roland Straub

European Central Bank (ECB)

Daria Taglioni

European Central Bank (ECB) - Directorate General Economics

Multiple version iconThere are 2 versions of this paper

Date Written: February 1, 2011

Abstract

In this paper we take a systematic look at recent trends in global protectionism and at the potential implications of a protectionist backlash for economic growth, using results from the recent economic literature and new model simulations. We find that there has so far been a moderate increase in actual protectionist measures to restrict trade through tariff and non-tariff barriers. At the same time, evidence from surveys shows that public pressure for more economic protection has been mounting since the mid-2000s, and has possibly intensified since the start of the financial crisis. However, no World Trade Organization (WTO) member has retreated into widespread trade restrictions or protectionism to date. Our model-based simulations suggest that the impairment of the global flow of trade would hamper the recovery from the crisis, as well as the long-term growth of the global economy. At the same time, it is unlikely that protectionism would help to correct existing current account imbalances. Moreover, the countries implementing protectionist measures should expect a deterioration of their international competitiveness, which would further affect the potential for longer-term real GDP growth.

Keywords: protectionism, trade, financial crisis, competitiveness, global imbalances, World Trade Organization

JEL Classification: F13, F15, F21, F53

Suggested Citation

Bussiere, Matthieu and Pérez-Barreiro, Emilia and Straub, Roland and Taglioni, Daria, Protectionist Responses to the Crisis: Global Trends and Implications (February 1, 2011). Available at SSRN: https://ssrn.com/abstract=1763785 or http://dx.doi.org/10.2139/ssrn.1763785

Matthieu Bussiere (Contact Author)

Banque de France ( email )

Paris
France

Emilia Pérez-Barreiro

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Roland Straub

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Daria Taglioni

European Central Bank (ECB) - Directorate General Economics ( email )

Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany

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