The Potential Impact of the Global Financial Crisis on World Trade

This paper models the global financial crisis as a combination of shocks to global housing markets and sharp increases in risk premia of firms, households and international investors in a global economic model. The model has six sectors of producti...

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Bibliographic Details
Main Authors: McKibbin, Warwick J., Stoeckel, Andrew
Format: Policy Research Working Paper
Language:English
Published: 2012
Subjects:
GDP
TAX
WTO
Online Access:http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20091118083139
http://hdl.handle.net/10986/4326
id okr-10986-4326
recordtype oai_dc
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic ACCOUNTING
ADVANCED ECONOMIES
ADVERSE EFFECT
AGGREGATE SUPPLY
AGRICULTURE
AMOUNT OF CAPITAL
ARBITRAGE
ASSET PRICE
ASSET PRICES
ASSET VALUATION
BAILOUTS
BALANCE SHEETS
BANK BORROWING
BANK GOVERNORS
BANK LENDING
BANK OPERATIONS
BANKING SYSTEMS
BANKRUPTCY
BASIS POINTS
BENCHMARK
BOND SPREADS
BOND YIELDS
BONDS
BUDGET CONSTRAINT
CAPITAL ACCUMULATION
CAPITAL FLOW
CAPITAL FLOWS
CAPITAL RAISING
CAPITAL STOCK
CARBON EMISSIONS
CASH TRANSFERS
CENTRAL BANK
CENTRAL BANK GOVERNORS
CENTRAL BANKS
COMMODITY
COMMODITY PRICE
COMMODITY PRICES
CONSUMER LOANS
CONSUMERS
CORPORATE BONDS
CORPORATE TAX
COST OF CAPITAL
CURRENT ACCOUNT BALANCES
CURRENT ACCOUNT DEFICITS
CURRENT ACCOUNT SURPLUSES
DEBT
DEFAULTS
DEFLATION
DEPOSITS
DEVELOPING COUNTRIES
DEVELOPING COUNTRY
DEVELOPING ECONOMIES
DIRECT PAYMENTS
DISCOUNT RATES
DISPOSABLE INCOME
DOMESTIC BANKS
DOMESTIC ECONOMY
DRIVERS
DURABLE
DURABLE GOOD
DURABLE GOODS
DURABLES
ECONOMIC GROWTH
ECONOMIC OUTLOOK
ECONOMIC RECOVERY
ELASTICITY
EQUILIBRIUM
EQUITIES
EQUITY PRICES
EXCHANGE RATE
EXPANSIONARY FISCAL POLICY
EXPECTED RETURNS
EXPENDITURE
EXPORTS
FAIR VALUE
FEDERAL RESERVE
FINANCIAL ASSETS
FINANCIAL CAPITAL
FINANCIAL CRISIS
FINANCIAL FLOWS
FINANCIAL INSTITUTIONS
FINANCIAL MARKETS
FINANCIAL REGULATION
FINANCIAL RISK
FINANCIAL SECTOR
FINANCIAL SHOCK
FINANCIAL STABILITY
FISCAL CONSOLIDATION
FISCAL DEFICIT
FISCAL DEFICITS
FISCAL POLICY
FORECASTS
FOREIGN BANK
FOREIGN CAPITAL
FOREIGN EXCHANGE
FREE BOND
FUTURE EARNINGS
FUTURE LABOR
GDP
GDP PER CAPITA
GENERAL EQUILIBRIUM
GLOBAL CAPITAL
GLOBAL CAPITAL FLOWS
GLOBAL ECONOMY
GLOBAL TRADE
GOVERNMENT BONDS
GOVERNMENT BORROWING
GOVERNMENT DEBT
GOVERNMENT DEFICITS
GOVERNMENT INVESTMENT
GOVERNMENT SPENDING
GROWTH RATE
GROWTH RATES
HOLDING
HOUSEHOLD INCOME
HOUSEHOLD WEALTH
HOUSING
HOUSING FINANCE
INCOME
INCOME EFFECT
INCOME ELASTICITY
INCOME TAX
INCOMES
INDUSTRIAL ECONOMIES
INFLATION
INFLATION RATE
INFRASTRUCTURE INVESTMENT
INFRASTRUCTURE PROJECTS
INSTRUMENT
INSURANCE
INTERNATIONAL BANK
INTERNATIONAL ECONOMICS
INTERNATIONAL INVESTORS
INTERNATIONAL TRADE
INVENTORIES
INVENTORY
INVESTING
INVESTMENT DECISION
INVESTMENT DECISIONS
INVESTMENT INCOME
LABOR MARKET
LAWS
LDCS
LEGISLATION
LENDERS
LEVEL OF INTEREST RATES
LIQUIDITY
LOAN
LOCAL GOVERNMENTS
LOSS OF CONFIDENCE
LOW INTEREST RATES
MACROECONOMIC ANALYSIS
MACROECONOMICS
MARGINAL PRODUCT
MARKET VALUATION
MARKET VALUE
MARKET VALUES
MINIMUM WAGE
MONETARY AUTHORITIES
MONETARY POLICY
MORTGAGE
MORTGAGE MARKET
MORTGAGE MARKETS
NET EXPORTS
NOMINAL INTEREST RATE
NOMINAL INTEREST RATES
OPEN ECONOMIES
OPTIMIZATION
OUTPUT GAP
PARTICULAR COUNTRY
PENSION
PENSION FUNDS
PERSONAL INCOME
POLICY RESPONSE
POLICY RESPONSES
POSITIVE EFFECTS
POTENTIAL OUTPUT
PRICE CHANGES
PRIVATE INVESTMENT
PRODUCTION FUNCTION
PRODUCTIVITY
PRODUCTIVITY GROWTH
PROTECTIONISM
PUBLIC POLICY
PUBLIC SPENDING
RAPID GROWTH
RATE OF RETURN
RATE OF RETURN TO CAPITAL
RATES OF INTEREST
RATES OF RETURN
REAL EXCHANGE RATE
REAL EXCHANGE RATES
REAL GDP
REAL INTEREST
REAL INTEREST RATE
REAL INTEREST RATES
RECESSION
REGULATORY OVERSIGHT
RESERVES
RISK PREMIUM
RISK PREMIUMS
RURAL INFRASTRUCTURE
SAVINGS
SEWAGE
SHORT TERM INTEREST RATES
SMALL INVESTORS
SOFT LOANS
STOCK MARKET
STOCK MARKETS
STOCKS
TAX
TAX BREAKS
TAX EXEMPTION
TAX RATES
TAX STRUCTURES
TELECOMMUNICATIONS
TRADE BALANCE
TRADE BALANCES
TRADE CREDIT
TRADE FINANCE
TRADE FLOWS
TRADE POLICY
TRADE PROTECTION
TRADES
TREASURIES
TREASURY
TREASURY BOND
TREASURY BOND YIELD
TRUSTEES
UNDERWRITERS
UNEMPLOYMENT
WAGE RIGIDITY
WEALTH
WEALTH EFFECTS
WORLD ECONOMIES
WORLD ECONOMY
WORLD FINANCIAL MARKETS
WORLD TRADE
WTO
spellingShingle ACCOUNTING
ADVANCED ECONOMIES
ADVERSE EFFECT
AGGREGATE SUPPLY
AGRICULTURE
AMOUNT OF CAPITAL
ARBITRAGE
ASSET PRICE
ASSET PRICES
ASSET VALUATION
BAILOUTS
BALANCE SHEETS
BANK BORROWING
BANK GOVERNORS
BANK LENDING
BANK OPERATIONS
BANKING SYSTEMS
BANKRUPTCY
BASIS POINTS
BENCHMARK
BOND SPREADS
BOND YIELDS
BONDS
BUDGET CONSTRAINT
CAPITAL ACCUMULATION
CAPITAL FLOW
CAPITAL FLOWS
CAPITAL RAISING
CAPITAL STOCK
CARBON EMISSIONS
CASH TRANSFERS
CENTRAL BANK
CENTRAL BANK GOVERNORS
CENTRAL BANKS
COMMODITY
COMMODITY PRICE
COMMODITY PRICES
CONSUMER LOANS
CONSUMERS
CORPORATE BONDS
CORPORATE TAX
COST OF CAPITAL
CURRENT ACCOUNT BALANCES
CURRENT ACCOUNT DEFICITS
CURRENT ACCOUNT SURPLUSES
DEBT
DEFAULTS
DEFLATION
DEPOSITS
DEVELOPING COUNTRIES
DEVELOPING COUNTRY
DEVELOPING ECONOMIES
DIRECT PAYMENTS
DISCOUNT RATES
DISPOSABLE INCOME
DOMESTIC BANKS
DOMESTIC ECONOMY
DRIVERS
DURABLE
DURABLE GOOD
DURABLE GOODS
DURABLES
ECONOMIC GROWTH
ECONOMIC OUTLOOK
ECONOMIC RECOVERY
ELASTICITY
EQUILIBRIUM
EQUITIES
EQUITY PRICES
EXCHANGE RATE
EXPANSIONARY FISCAL POLICY
EXPECTED RETURNS
EXPENDITURE
EXPORTS
FAIR VALUE
FEDERAL RESERVE
FINANCIAL ASSETS
FINANCIAL CAPITAL
FINANCIAL CRISIS
FINANCIAL FLOWS
FINANCIAL INSTITUTIONS
FINANCIAL MARKETS
FINANCIAL REGULATION
FINANCIAL RISK
FINANCIAL SECTOR
FINANCIAL SHOCK
FINANCIAL STABILITY
FISCAL CONSOLIDATION
FISCAL DEFICIT
FISCAL DEFICITS
FISCAL POLICY
FORECASTS
FOREIGN BANK
FOREIGN CAPITAL
FOREIGN EXCHANGE
FREE BOND
FUTURE EARNINGS
FUTURE LABOR
GDP
GDP PER CAPITA
GENERAL EQUILIBRIUM
GLOBAL CAPITAL
GLOBAL CAPITAL FLOWS
GLOBAL ECONOMY
GLOBAL TRADE
GOVERNMENT BONDS
GOVERNMENT BORROWING
GOVERNMENT DEBT
GOVERNMENT DEFICITS
GOVERNMENT INVESTMENT
GOVERNMENT SPENDING
GROWTH RATE
GROWTH RATES
HOLDING
HOUSEHOLD INCOME
HOUSEHOLD WEALTH
HOUSING
HOUSING FINANCE
INCOME
INCOME EFFECT
INCOME ELASTICITY
INCOME TAX
INCOMES
INDUSTRIAL ECONOMIES
INFLATION
INFLATION RATE
INFRASTRUCTURE INVESTMENT
INFRASTRUCTURE PROJECTS
INSTRUMENT
INSURANCE
INTERNATIONAL BANK
INTERNATIONAL ECONOMICS
INTERNATIONAL INVESTORS
INTERNATIONAL TRADE
INVENTORIES
INVENTORY
INVESTING
INVESTMENT DECISION
INVESTMENT DECISIONS
INVESTMENT INCOME
LABOR MARKET
LAWS
LDCS
LEGISLATION
LENDERS
LEVEL OF INTEREST RATES
LIQUIDITY
LOAN
LOCAL GOVERNMENTS
LOSS OF CONFIDENCE
LOW INTEREST RATES
MACROECONOMIC ANALYSIS
MACROECONOMICS
MARGINAL PRODUCT
MARKET VALUATION
MARKET VALUE
MARKET VALUES
MINIMUM WAGE
MONETARY AUTHORITIES
MONETARY POLICY
MORTGAGE
MORTGAGE MARKET
MORTGAGE MARKETS
NET EXPORTS
NOMINAL INTEREST RATE
NOMINAL INTEREST RATES
OPEN ECONOMIES
OPTIMIZATION
OUTPUT GAP
PARTICULAR COUNTRY
PENSION
PENSION FUNDS
PERSONAL INCOME
POLICY RESPONSE
POLICY RESPONSES
POSITIVE EFFECTS
POTENTIAL OUTPUT
PRICE CHANGES
PRIVATE INVESTMENT
PRODUCTION FUNCTION
PRODUCTIVITY
PRODUCTIVITY GROWTH
PROTECTIONISM
PUBLIC POLICY
PUBLIC SPENDING
RAPID GROWTH
RATE OF RETURN
RATE OF RETURN TO CAPITAL
RATES OF INTEREST
RATES OF RETURN
REAL EXCHANGE RATE
REAL EXCHANGE RATES
REAL GDP
REAL INTEREST
REAL INTEREST RATE
REAL INTEREST RATES
RECESSION
REGULATORY OVERSIGHT
RESERVES
RISK PREMIUM
RISK PREMIUMS
RURAL INFRASTRUCTURE
SAVINGS
SEWAGE
SHORT TERM INTEREST RATES
SMALL INVESTORS
SOFT LOANS
STOCK MARKET
STOCK MARKETS
STOCKS
TAX
TAX BREAKS
TAX EXEMPTION
TAX RATES
TAX STRUCTURES
TELECOMMUNICATIONS
TRADE BALANCE
TRADE BALANCES
TRADE CREDIT
TRADE FINANCE
TRADE FLOWS
TRADE POLICY
TRADE PROTECTION
TRADES
TREASURIES
TREASURY
TREASURY BOND
TREASURY BOND YIELD
TRUSTEES
UNDERWRITERS
UNEMPLOYMENT
WAGE RIGIDITY
WEALTH
WEALTH EFFECTS
WORLD ECONOMIES
WORLD ECONOMY
WORLD FINANCIAL MARKETS
WORLD TRADE
WTO
McKibbin, Warwick J.
Stoeckel, Andrew
The Potential Impact of the Global Financial Crisis on World Trade
geographic_facet The World Region
The World Region
relation Policy Research working paper ; no. WPS 5134
description This paper models the global financial crisis as a combination of shocks to global housing markets and sharp increases in risk premia of firms, households and international investors in a global economic model. The model has six sectors of production and trade in 15 major economies and regions. The paper shows that the shocks observed in financial markets can be used to generate the severe economic contraction in global trade and production experienced in 2009. In particular the distinction between the production and trade of durable and non durable goods plays a key role in explaining the much larger contraction in trade than GDP experienced by most economies. The paper explores the implications of the large increase in fiscal deficits and the implications of a global trade war in response to the financial crisis.
format Publications & Research :: Policy Research Working Paper
author McKibbin, Warwick J.
Stoeckel, Andrew
author_facet McKibbin, Warwick J.
Stoeckel, Andrew
author_sort McKibbin, Warwick J.
title The Potential Impact of the Global Financial Crisis on World Trade
title_short The Potential Impact of the Global Financial Crisis on World Trade
title_full The Potential Impact of the Global Financial Crisis on World Trade
title_fullStr The Potential Impact of the Global Financial Crisis on World Trade
title_full_unstemmed The Potential Impact of the Global Financial Crisis on World Trade
title_sort potential impact of the global financial crisis on world trade
publishDate 2012
url http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20091118083139
http://hdl.handle.net/10986/4326
_version_ 1764390939351056384
spelling okr-10986-43262021-04-23T14:02:17Z The Potential Impact of the Global Financial Crisis on World Trade McKibbin, Warwick J. Stoeckel, Andrew ACCOUNTING ADVANCED ECONOMIES ADVERSE EFFECT AGGREGATE SUPPLY AGRICULTURE AMOUNT OF CAPITAL ARBITRAGE ASSET PRICE ASSET PRICES ASSET VALUATION BAILOUTS BALANCE SHEETS BANK BORROWING BANK GOVERNORS BANK LENDING BANK OPERATIONS BANKING SYSTEMS BANKRUPTCY BASIS POINTS BENCHMARK BOND SPREADS BOND YIELDS BONDS BUDGET CONSTRAINT CAPITAL ACCUMULATION CAPITAL FLOW CAPITAL FLOWS CAPITAL RAISING CAPITAL STOCK CARBON EMISSIONS CASH TRANSFERS CENTRAL BANK CENTRAL BANK GOVERNORS CENTRAL BANKS COMMODITY COMMODITY PRICE COMMODITY PRICES CONSUMER LOANS CONSUMERS CORPORATE BONDS CORPORATE TAX COST OF CAPITAL CURRENT ACCOUNT BALANCES CURRENT ACCOUNT DEFICITS CURRENT ACCOUNT SURPLUSES DEBT DEFAULTS DEFLATION DEPOSITS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DIRECT PAYMENTS DISCOUNT RATES DISPOSABLE INCOME DOMESTIC BANKS DOMESTIC ECONOMY DRIVERS DURABLE DURABLE GOOD DURABLE GOODS DURABLES ECONOMIC GROWTH ECONOMIC OUTLOOK ECONOMIC RECOVERY ELASTICITY EQUILIBRIUM EQUITIES EQUITY PRICES EXCHANGE RATE EXPANSIONARY FISCAL POLICY EXPECTED RETURNS EXPENDITURE EXPORTS FAIR VALUE FEDERAL RESERVE FINANCIAL ASSETS FINANCIAL CAPITAL FINANCIAL CRISIS FINANCIAL FLOWS FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL REGULATION FINANCIAL RISK FINANCIAL SECTOR FINANCIAL SHOCK FINANCIAL STABILITY FISCAL CONSOLIDATION FISCAL DEFICIT FISCAL DEFICITS FISCAL POLICY FORECASTS FOREIGN BANK FOREIGN CAPITAL FOREIGN EXCHANGE FREE BOND FUTURE EARNINGS FUTURE LABOR GDP GDP PER CAPITA GENERAL EQUILIBRIUM GLOBAL CAPITAL GLOBAL CAPITAL FLOWS GLOBAL ECONOMY GLOBAL TRADE GOVERNMENT BONDS GOVERNMENT BORROWING GOVERNMENT DEBT GOVERNMENT DEFICITS GOVERNMENT INVESTMENT GOVERNMENT SPENDING GROWTH RATE GROWTH RATES HOLDING HOUSEHOLD INCOME HOUSEHOLD WEALTH HOUSING HOUSING FINANCE INCOME INCOME EFFECT INCOME ELASTICITY INCOME TAX INCOMES INDUSTRIAL ECONOMIES INFLATION INFLATION RATE INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PROJECTS INSTRUMENT INSURANCE INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL INVESTORS INTERNATIONAL TRADE INVENTORIES INVENTORY INVESTING INVESTMENT DECISION INVESTMENT DECISIONS INVESTMENT INCOME LABOR MARKET LAWS LDCS LEGISLATION LENDERS LEVEL OF INTEREST RATES LIQUIDITY LOAN LOCAL GOVERNMENTS LOSS OF CONFIDENCE LOW INTEREST RATES MACROECONOMIC ANALYSIS MACROECONOMICS MARGINAL PRODUCT MARKET VALUATION MARKET VALUE MARKET VALUES MINIMUM WAGE MONETARY AUTHORITIES MONETARY POLICY MORTGAGE MORTGAGE MARKET MORTGAGE MARKETS NET EXPORTS NOMINAL INTEREST RATE NOMINAL INTEREST RATES OPEN ECONOMIES OPTIMIZATION OUTPUT GAP PARTICULAR COUNTRY PENSION PENSION FUNDS PERSONAL INCOME POLICY RESPONSE POLICY RESPONSES POSITIVE EFFECTS POTENTIAL OUTPUT PRICE CHANGES PRIVATE INVESTMENT PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH PROTECTIONISM PUBLIC POLICY PUBLIC SPENDING RAPID GROWTH RATE OF RETURN RATE OF RETURN TO CAPITAL RATES OF INTEREST RATES OF RETURN REAL EXCHANGE RATE REAL EXCHANGE RATES REAL GDP REAL INTEREST REAL INTEREST RATE REAL INTEREST RATES RECESSION REGULATORY OVERSIGHT RESERVES RISK PREMIUM RISK PREMIUMS RURAL INFRASTRUCTURE SAVINGS SEWAGE SHORT TERM INTEREST RATES SMALL INVESTORS SOFT LOANS STOCK MARKET STOCK MARKETS STOCKS TAX TAX BREAKS TAX EXEMPTION TAX RATES TAX STRUCTURES TELECOMMUNICATIONS TRADE BALANCE TRADE BALANCES TRADE CREDIT TRADE FINANCE TRADE FLOWS TRADE POLICY TRADE PROTECTION TRADES TREASURIES TREASURY TREASURY BOND TREASURY BOND YIELD TRUSTEES UNDERWRITERS UNEMPLOYMENT WAGE RIGIDITY WEALTH WEALTH EFFECTS WORLD ECONOMIES WORLD ECONOMY WORLD FINANCIAL MARKETS WORLD TRADE WTO This paper models the global financial crisis as a combination of shocks to global housing markets and sharp increases in risk premia of firms, households and international investors in a global economic model. The model has six sectors of production and trade in 15 major economies and regions. The paper shows that the shocks observed in financial markets can be used to generate the severe economic contraction in global trade and production experienced in 2009. In particular the distinction between the production and trade of durable and non durable goods plays a key role in explaining the much larger contraction in trade than GDP experienced by most economies. The paper explores the implications of the large increase in fiscal deficits and the implications of a global trade war in response to the financial crisis. 2012-03-19T19:14:02Z 2012-03-19T19:14:02Z 2009-11-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20091118083139 http://hdl.handle.net/10986/4326 English Policy Research working paper ; no. WPS 5134 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region