Would protectionism defuse global imbalances
and spur economic activity?
A scenario analysis
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Hamid Faruqee
International Monetary Fund
Douglas Laxton
International Monetary Fund
Dirk Muir
Bank of Canada
Paolo Pesenti
Federal Reserve Bank of New York, NBER and CEPR
This draft: October 2006
We thank Matt Canzoneri, Mick Devereux, Dale Henderson, Christina Knowles, Gian Maria
Milesi-Ferretti, Stephen Tokarick and Dietrich Vollrath, as well as two anonymous referees, for
helpful comments and suggestions. We also thank Susanna Mursula and Chris Tonetti for invaluable
assistance. The views expressed in this paper are those of the authors and should not be attributed
to the International Monetary Fund, its Executive Board or its management, the Bank of Canada,
the Federal Reserve Bank of New York, the Federal Reserve System, or any other institution with
which the authors are a¢ liated.
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