What Do We Really Know about Protection before the Great Depression

Evidence from Italy

Datos Bibliográficos

ID5753152
AutoresGiovanni Federico (0000-0002-2683-683X, European University Institute), Michelangelo Vasta (0000-0002-8683-8095, University of Siena)
Año2015
Volumen75
Número4
Páginas993-1029
Fecha de publicación2015-12-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaThe Journal of Economic History (JOURNAL)
Identificadores de la revistaISSN: 0022-0507 • E-ISSN: 1471-6372
EditorialCambridge University Press (CUP) (PUBLISHER)
DOI10.1017/s0022050715001552
OpenAlexW2202221294
IdiomaEN
Citas recibidas10
Referencias citadas25

The impact of protection on economic growth has enjoyed a revival in recent times, with the publication of a number of comparative quantitative papers. They all share a common weakness: they measure protection as the ratio of custom revenues to import value, which biases results if demand for imports is not perfectly inelastic. In this article, we show that the measure of protection matters. We estimate the James Anderson and Peter Neary (2005) Trade Restrictiveness Index for Italy from unification to the Great Depression. We suggest a different interpretation of some key moments of Italian trade policy and we show that the aggregate welfare losses were small in the long run and mostly related to protection on sugar in the 1880s and 1890s. We document that using different measures of protection affects results of the causal relation between trade policy on economic growth in Italy and in the United States. Accordingly, we argue that a systematic re-estimating of protection in the economic history of trade policy is needed

Depression (economics) · Economics · Great Depression · Keynesian economics · Political science · Italy: Economic History and Contemporary Issues · Law · Psychology