The Effects of Tariffs on GDP per Capita
10 Pages Posted: 24 Jul 2017
Date Written: July 18, 2017
Since the time of Adam Smith, high tariffs have been decried by economists as counterproductive to a country's economic growth. However, in recent years, this consensus has come under scrutiny, not just from the political sector but also the academic sector. Using GDP per Capita as a measure of economic well-being and the Economic Freedom of the World Index to measure freedom to trade, I find a distinct positive effect lower mean tariff rates have on GDP per capita. The size of the effect varies on the income of the country, with the strongest effect on the poorest nations and the weakest effect on the wealthiest nations.
Keywords: International trade, tariffs, property rights
JEL Classification: F14, F43, F60,O43
Suggested Citation: Suggested Citation