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What is behind the decoupling of global activity and trade?

Author

Listed:
  • Bobasu, Alina
  • Quaglietti, Lucia
  • Manu, Ana-Simona

Abstract

While both global activity and trade have been declining since mid-2018, world trade has slowed particularly sharply. This box investigates the reasons behind the decline in global trade and its decoupling from economic activity. This is largely explained by a turnaround in the most trade-intensive components of global demand, such as investment, exacerbated by rising global uncertainty and tighter financing conditions. From a production perspective, the decline in investment was reflected in a sharp slowdown in manufacturing output. JEL Classification: F44, F14

Suggested Citation

  • Bobasu, Alina & Quaglietti, Lucia & Manu, Ana-Simona, 2019. "What is behind the decoupling of global activity and trade?," Economic Bulletin Boxes, European Central Bank, vol. 5.
    • Handle: RePEc:ecb:ecbbox:2019:0005:1
    Note: 2663204
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    File URL: https://www.ecb.europa.eu//pub/economic-bulletin/focus/2019/html/ecb.ebbox201905_01~874dddf42e.en.html
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    Citations

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    Cited by:

    1. Khalil, Makram, 2020. "Global oil prices and the macroeconomy: The role of tradeable manufacturing versus nontradeable services," Discussion Papers 60/2020, Deutsche Bundesbank.
    2. Khalil, Makram, 2022. "Oil prices, manufacturing goods, and nontradeable services," Journal of International Economics, Elsevier, vol. 134(C).

    More about this item

    Keywords

    Global activity; Global trade; trade elasticity;
    All these keywords.

    JEL classification:

    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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