Growth, Real Exchange Rates and Trade Protectionism Since the Financial Crisis

31 Pages Posted: 5 Oct 2016

See all articles by Georgios Georgiadis

Georgios Georgiadis

European Central Bank (ECB)

Johannes Gräb

European Central Bank (ECB)

Date Written: November 2016

Abstract

Existing evidence suggests that protectionist activity since the financial crisis has been muted, raising the question whether the historically well‐documented relationship between growth, real exchange rates and trade protectionism has broken down. We use a novel and comprehensive dataset that stretches beyond the traditionally considered tariff and trade defense measures to study the responsiveness of trade policies to business cycles and price competitiveness in the time period since the financial crisis. We find that the specter of protectionism has not been banished. Countries continue to pursue more trade‐restrictive policies when they experience recessions and/or when their competitiveness deteriorates. Our results suggest that the global economy continues to be exposed to the risk of a creeping return of trade protectionism.

Suggested Citation

Georgiadis, Georgios and Grab, Johannes, Growth, Real Exchange Rates and Trade Protectionism Since the Financial Crisis (November 2016). Review of International Economics, Vol. 24, Issue 5, pp. 1050-1080, 2016, Available at SSRN: https://ssrn.com/abstract=2847986 or http://dx.doi.org/10.1111/roie.12247

Georgios Georgiadis (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Johannes Grab

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
216
PlumX Metrics