The Global Trade Slowdown : Cyclical or Structural?

This paper focuses on the sluggish growth of world trade relative to income growth in recent years. We use a simple empirical strategy based on an error correction model to assess whether the global trade slowdown is structural or cyclical. An estimate of the relationship between trade and income in...

Full description

Bibliographic Details
Main Authors:	Constantinescu, Cristina, Mattoo, Aaditya, Ruta, Michele
Format:	Journal Article
Published:	Published by Oxford University Press on behalf of the World Bank 2021
Subjects:	GLOBAL TRADE TRADE ELASTICITY GLOBAL VALUE CHAIN TRADE FLOWS
Online Access:	http://hdl.handle.net/10986/36074

id	okr-10986-36074
recordtype	oai_dc
spelling	okr-10986-360742021-08-07T05:10:28Z The Global Trade Slowdown : Cyclical or Structural? Constantinescu, Cristina Mattoo, Aaditya Ruta, Michele GLOBAL TRADE TRADE ELASTICITY GLOBAL VALUE CHAIN TRADE FLOWS This paper focuses on the sluggish growth of world trade relative to income growth in recent years. We use a simple empirical strategy based on an error correction model to assess whether the global trade slowdown is structural or cyclical. An estimate of the relationship between trade and income in the past four decades reveals that the long-term trade elasticity rose sharply in the 1990s, but declined significantly in the 2000s, even before the global financial crisis. These results suggest that trade is growing slowly not only because of slow GDP growth, but also because of a structural change in the trade-GDP relationship in recent years. The available evidence suggests that a key driver of structural change over the 2000s is the slowing pace of international vertical specialization, which accounts for between one-quarter and one-half of the decline in import growth from the 1990s to the 2000s. 2021-08-06T20:18:48Z 2021-08-06T20:18:48Z 2020-02 Journal Article World Bank Economic Review 1564-698X http://hdl.handle.net/10986/36074 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Published by Oxford University Press on behalf of the World Bank Publications & Research Publications & Research :: Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	GLOBAL TRADE TRADE ELASTICITY GLOBAL VALUE CHAIN TRADE FLOWS
spellingShingle	GLOBAL TRADE TRADE ELASTICITY GLOBAL VALUE CHAIN TRADE FLOWS Constantinescu, Cristina Mattoo, Aaditya Ruta, Michele The Global Trade Slowdown : Cyclical or Structural?
description	This paper focuses on the sluggish growth of world trade relative to income growth in recent years. We use a simple empirical strategy based on an error correction model to assess whether the global trade slowdown is structural or cyclical. An estimate of the relationship between trade and income in the past four decades reveals that the long-term trade elasticity rose sharply in the 1990s, but declined significantly in the 2000s, even before the global financial crisis. These results suggest that trade is growing slowly not only because of slow GDP growth, but also because of a structural change in the trade-GDP relationship in recent years. The available evidence suggests that a key driver of structural change over the 2000s is the slowing pace of international vertical specialization, which accounts for between one-quarter and one-half of the decline in import growth from the 1990s to the 2000s.
format	Journal Article
author	Constantinescu, Cristina Mattoo, Aaditya Ruta, Michele
author_facet	Constantinescu, Cristina Mattoo, Aaditya Ruta, Michele
author_sort	Constantinescu, Cristina
title	The Global Trade Slowdown : Cyclical or Structural?
title_short	The Global Trade Slowdown : Cyclical or Structural?
title_full	The Global Trade Slowdown : Cyclical or Structural?
title_fullStr	The Global Trade Slowdown : Cyclical or Structural?
title_full_unstemmed	The Global Trade Slowdown : Cyclical or Structural?
title_sort	global trade slowdown : cyclical or structural?
publisher	Published by Oxford University Press on behalf of the World Bank
publishDate	2021
url	http://hdl.handle.net/10986/36074
_version_	1764484372810956800

The Global Trade Slowdown : Cyclical or Structural?

Similar Items