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Crisis and Trade: Bad Times for High Quality

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  • Antoine Berthou
  • Charlotte Emlinger

Abstract

Similar products are imported at different prices, suggesting that varieties are vertically differentiated between low and high quality. This differentiation of varieties according to their quality enables to provide new evidence regarding the collapse of world trade during the recent crisis. The decrease of world demand has affected the imports of high quality varieties to a larger extent, leading to a decrease of import prices. Our econometric estimations over a period of ten years confirm that the revenue elasticity of import quantity is larger for high quality imports. Hence, a decrease of world revenue is expected to decrease more the world imports of high quality as compared with the imports of low quality. To the contrary, recovery should benefit more to the imports of high quality.

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Bibliographic Info

Article provided by CEPII research center in its journal La Lettre du CEPII.

Volume (Year): (2009)
Issue (Month): 293 ()
Pages:

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Handle: RePEc:cii:cepill:2009-293

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Related research

Keywords: CRISIS; TRADE; HIGH QUALITY;

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Cited by:
  1. Soledad Zignago, 2010. "Determinantes del comercio internacional en tiempos de crisis," Working Papers 1016, BBVA Bank, Economic Research Department.

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