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A Measurement of Aggregate Trade Restrictions and their Economic Effects

Author

Listed:
  • Julia Estefania-Flores
  • Davide Furceri
  • Mrs. Swarnali A Hannan
  • Mr. Jonathan David Ostry
  • Mr. Andrew K. Rose

Abstract

We develop a new Measure of Aggregate Trade Restrictions (MATR) using data from the IMF’s Annual Report on Exchange Arrangements and Exchange Restrictions. MATR is an empirical measure of how restrictive official government policy is towards the international flow of goods and services. MATR is simple, ad hoc, plausible, quantitative, easily updated, based solely on policy-relevant measures of trade policy, and covers an unbalanced sample of up to 157 countries annually between 1949 and 2019. MATR is strongly correlated with, but more comprehensive than, existing measures of openness and trade policy existing measures. We use MATR to show that trade restrictions are harmful for the economy and lead to significant contractions in output.

Suggested Citation

  • Julia Estefania-Flores & Davide Furceri & Mrs. Swarnali A Hannan & Mr. Jonathan David Ostry & Mr. Andrew K. Rose, 2022. "A Measurement of Aggregate Trade Restrictions and their Economic Effects," IMF Working Papers 2022/001, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2022/001
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    Cited by:

    1. Campos, Rodolfo G. & Estefania-Flores, Julia & Furceri, Davide & Timini, Jacopo, 2023. "Geopolitical fragmentation and trade," Journal of Comparative Economics, Elsevier, vol. 51(4), pages 1289-1315.
    2. Estefania-Flores, Julia & Furceri, Davide & Hannan, Swarnali A. & Ostry, Jonathan D. & Rose, Andrew K., 2023. "Are trade restrictions counter-cyclical? Evidence from a new aggregate measure," Journal of Policy Modeling, Elsevier, vol. 45(4), pages 745-767.
    3. Kym Anderson & Sundar Ponnusamy, 2022. "Structural transformation away from agriculture: What role for trade?," Departmental Working Papers 2022-04, The Australian National University, Arndt-Corden Department of Economics.

    More about this item

    Keywords

    Empricial; data; protection; tariffs; non-tariff barriers; policy; annual; panel.; MATR data construction; MATR value; MATR component; changes in MATR; evolution of MATR; Trade barriers; Tariffs; Trade policy; Imports; Exports; Global; alternative measures;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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