The consequences of a trade collapse: Economics and politics in Weimar

As a centre of excellence for innovative research on trade policy and its inclusiveness, we aim to equip the UK with the capability to formulate and implement a trade policy tailored to the needs of the whole of the UK, while recognising the importance of the multilateral trading system and the UK’s role within it. [...] Figure A.1 panel B shows that the decline in demand for German exports was particularly large in the origin of the Great Depression, the US, and to a considerable extent this was due to the erection of new tariff barriers with the 1930 Smoot-Hawley Tariff Act. [...] To construct our instrument we use the change in UK and French exports to the United States, the country where the Great Depression originated.31 Identification in our IV-strategy is based on the assumption that domestic German developments did not affect the pattern of US imports from the UK and France. [...] The local German employment structure across industries is interacted with the exogenous shifters capturing the decline in US demand for UK and French exports: ∆US ImportsUK|FRi,32−28 is the change in US Imports from the UK and France between 1928-32 in industry i in 1,000RM,33 and UK|FRLi,25 is a proxy for industry-level employment in the UK and France.34 We construct the instrument for the indir. [...] Our main findings are presented in Figure 7 panel A, where we plot the coefficient capturing the impact of the export shock on the change in support for different parties, starting from the far-right (top) and moving to the far-left (bottom).44 The last line presents instead the effect on turnout.