INCREASED PROTECTION IN THE 1980S - EXCHANGE-RATES AND INSTITUTIONS

The strong appreciation of the U.S. dollar between 1980 and 1985 encou raged the substitution of imports for domestically produced goods for a variety of products. This, in turn, increased the demand for trade p rotection. Many of these demands were satisfied via ''apolitical'' U.S . antidumping and countervail regulations, yielding ad valorem tariffs well above current average statutory duties. The supply of trade prot ection is developed via a principal-agent model that describes the pot ential gains to both the regulatory agency and the legislator. Empiric al results support the model specification, finding both exchange rate and political cycles in the use of ''apolitical'' trade protection.