The views expressed in this paper do not necessarily represent those of the European Central Bank (ECB), the Banque de France or the Eurosystem. We thank T. Bracke, F. Di Mauro, E. Dorrucci, K. Forster van Aerssen, M. Fratzscher, B. Hoekman, H.-J. Klöckers, G. Korteweg, G. Noblet, A. Popov, C. Thimann as well as seminar participants at the ECB, at the 2011 annual Congress of the American Economic Association in Denver and at the GEP Conference on ‘The Global Financial Crisis’ at the University of Nottingham of Ningbo for helpful comments and discussions.
Protectionist Responses to the Crisis: Global Trends and Implications
Article first published online: 26 MAY 2011
© 2011 Blackwell Publishing Ltd
The World Economy
Special Issue: CHINA AND THE GLOBAL FINANCIAL CRISIS
Volume 34, Issue 5, pages 826–852, May 2011
How to Cite
Bussière, M., Pérez-Barreiro, E., Straub, R. and Taglioni, D. (2011), Protectionist Responses to the Crisis: Global Trends and Implications. World Economy, 34: 826–852. doi: 10.1111/j.1467-9701.2011.01355.x
- Issue published online: 26 MAY 2011
- Article first published online: 26 MAY 2011
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 so far the increase in actual protectionist measures to restrict trade through tariff and non-tariff barriers has been moderate. None of the World Trade Organization (WTO) members has retreated into widespread trade restrictions or protectionism to date. At the same time, however, 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. Meanwhile, our model-based simulations suggest that the impairment of the global flow of trade would hamper the recovery process 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 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.