IMPACT OF TARIFF ON INCOME: CROSS COUNTRY ANALYSIS

INTRODUCTION Sidra Imran Amin1 Ambreen Fatima2 The ratio between the world trade and the world GDP has been a subject of attention in the recent literature which is also a summary statistic for globalization. According to the International Monetary Fund statistics a sharp decline is observed in both the volume and the value of the goods and services traded. IMF states that the volume has lessened and the value in terms of dollar trade has almost collapsed during the latter part of 2014 and a 10% fall is seen regarding its value mainly due to the sharp decline in imports and a drop in the oil prices and appreciated dollar value. The volume of trade has experienced a very low growth rate amounting to half the average of what it was during the previous years. The import growth is observed to have slowed down for both developed economies and the developing economies. However, the developed economies experienced the downturn first mainly due to the debt crises in the European zone. The slow growth of trade has now increased in pace and the driving factor is the similar weak conditions in the developing countries which are also exporting. To understand the reasons behind these changes, the economists have studied the relationship between import and growth along with the relative shift in the prices. The growth factors