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Pourquoi ≪Achetez Américain≫ n’est pas une bonne idée mais les politiciens continuent à aimer ça .
Author(s) -
Larch Mario,
Lechthaler Wolfgang
Publication year - 2011
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.1540-5982.2011.01657.x
Subject(s) - protectionism , recession , openness to experience , stimulus (psychology) , china , economics , international economics , great recession , vulnerability (computing) , monetary economics , business , market economy , labour economics , political science , macroeconomics , psychology , social psychology , law , psychotherapist , computer security , computer science
Abstract When the world economy was recently hit by a severe recession, governments all over the world reacted by initiating stimulus packages. Some countries (among them, most notably, China and the US) tried to put special emphasis on their home industries by including ‘Buy National’ clauses into the stimulus package. By analyzing the dynamics of transitory changes of trade barriers as a short‐run response to an economic downturn, we show that beggar‐thy‐neighbour policies do not work. We then come up with two rationales that help us understand why countries nevertheless consider protectionism to be a good response to a recession: (i) the lobbying of domestic, non‐exporting firms, and (ii) the relationship between vulnerability, the degree of openness and loss aversion of consumers.