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The impact of the 1932 General Tariff: a difference-in-difference approach

Author

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  • Simon P. Lloyd

    (Bank of England)

  • Solomos Solomou

    (University of Cambridge)

Abstract

We evaluate the effect of the 1932 British General Tariff on the output, labour productivity and employment growth of British industries. We provide a new disaggregated data set that matches industry-level Census of Production data with industry-specific tariff rates to accurately isolate treatment and control groups and estimate the effect of the General Tariff using difference-in-difference regressions. We evaluate a two-group comparison, between newly and non-newly protected industries, and a three-group comparison, between non-newly protected industries and newly protected industries further divided into those given a baseline 10% tariff rate and those given additional tariffs. In the two-group comparison, we identify a tariff effect that is large and statistically significant on output and productivity. In the three-group comparison, we show that the positive output and productivity effects of the tariff arise from the additional tariff protection, over and above the 10% level. These effects are observed over the periods 1930–1935 and 1930–1948, suggesting both short-run and medium-term effects on output and productivity of UK industries protected by the 1932 General Tariff.

Suggested Citation

  • Simon P. Lloyd & Solomos Solomou, 2020. "The impact of the 1932 General Tariff: a difference-in-difference approach," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 14(1), pages 41-60, January.
    • Handle: RePEc:spr:cliomt:v:14:y:2020:i:1:d:10.1007_s11698-019-00184-z
    DOI: 10.1007/s11698-019-00184-z
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    Cited by:

    1. Brian D. Varian, 2024. "Market integration and a lower-productivity economy: the case of Australian federation and Queensland’s manufacturing sector, 1897–1906," CEH Discussion Papers 06, Centre for Economic History, Research School of Economics, Australian National University.
    2. Brian D. Varian, 2024. "The unavailing origin of Australian protectionism? Victoria's McCulloch Tariff of 1866," CEH Discussion Papers 08, Centre for Economic History, Research School of Economics, Australian National University.

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    More about this item

    Keywords

    Trade policy; General Tariff; Difference-in-difference;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • N64 - Economic History - - Manufacturing and Construction - - - Europe: 1913-

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