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Is World Trade Slowing Down? New Evidence on Trade-Income Elasticity

Author

Listed:
  • Amaya Altuzarra
  • Ricardo Bustillo
  • Carlos Rodriguez

Abstract

This paper furthers and updates the research on the nature of the so-called global trade slowdown. Not only do we explain and discuss the determinants of this phenomenon, but we also offer an empirical description of the recent evolution of trade and trade elasticity. With the purpose of testing whether this is a structural phenomenon or not, we build an Error Correction Model for both world and regional data on trade and income using data from the World Bank for the period 1970-2017. World, OECD and Asian countries trade elasticity figures show a remarkable reduction after the hyperglobalization period (1986-2001), opposed to those of Latin America where trade volume has not stagnated so much. This slowdown might have major consequences for any country, but especially for those which have relied more intensively on trade as an engine for growth. JEL: C22, F15.

Suggested Citation

  • Amaya Altuzarra & Ricardo Bustillo & Carlos Rodriguez, 2023. "Is World Trade Slowing Down? New Evidence on Trade-Income Elasticity," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 70(2), pages 191-217.
    • Handle: RePEc:voj:journl:v:70:y:2023:i:2:p:191-217:id:875
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    More about this item

    Keywords

    Global trade; Trade-income elasticity; ECM;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F15 - International Economics - - Trade - - - Economic Integration

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