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The Empire Project: Trade Policy in Interwar Canada

Author

Listed:
  • Markus Lampe

    (Vienna University of Economics and Business - WU - Wirtschaftsuniversität Wien [Austria])

  • Kevin Hjortshøj O’rourke

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique, NYU - NYU System, CEPR - Center for Economic Policy Research)

  • Lorenz Reiter

    (Vienna University of Economics and Business - WU - Wirtschaftsuniversität Wien [Austria])

  • Yoto V Yotov

    (Drexel University, Ifo Institute, CESifo - CESifo - Munich)

Abstract

This paper uses a new dataset on the universe of Canadian imports and tariffs between 1924 and 1936, disaggregated into 1697 goods originating in 112 countries, to analyze the impact on Canadian imports of interwar Canadian trade policy, including the 1932 Ottawa trade agreements. Rather than use a dummy variable approach, we compute the impact of individual tariffs which varied substantially across goods, trade partners, and time. We perform a variety of counterfactual exercises to determine the impact of tariffs on trade flows. The overall impact of post-1929 tariff shifts, including the 1932 agreements, was relatively small, reflecting the fact that Canadian trade policy was already highly protectionist: trade agreements can have heterogenous effects on participants because the shocks involved are different. Compared with a free trade counterfactual, the impact of the overall structure of protection on Canadian imports was large.

Suggested Citation

  • Markus Lampe & Kevin Hjortshøj O’rourke & Lorenz Reiter & Yoto V Yotov, 2024. "The Empire Project: Trade Policy in Interwar Canada," Post-Print hal-04801537, HAL.
    • Handle: RePEc:hal:journl:hal-04801537
    DOI: 10.1016/j.jinteco.2024.104024
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-04801537v1
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