The protectionist sentiment in the seventies: Its implications for factor real incomes in the U.S.

Abstract

With the unsatisfactory national and international economic performance of many Western, industrial economies during most of the 1970's, a protectionist fever is spreading. The U.S. is one victim. If the protectionist sentiment is translated into action, relative commodity prices in the U.S. will be altered, and other changes will follow inevitably. A redistribution of factor real incomes is one inevitable consequence, and is the subject of this study. In examining the U.S., it was found that a more restrictive U.S. commercial policy would result in a redistribution of real income from more skilled to less skilled labor groups. However, under most circumstances the redistribution of income can be expected to be small.