Advanced Search
MyIDEAS: Login

Understanding the World Trade Collapse

Contents:

Author Info

  • Calista Cheung
  • Stéphanie Guichard

Abstract

The collapse in world trade volumes at the end of 2008 and beginning of 2009 was exceptional by historical standards. This paper shows that world demand (to which trade has become more responsive in recent decades) can explain most of the collapse in world trade, but that tight credit conditions have likely amplified the short-term trade response. Credit tightening likely accelerated the trade decline through trade finance constraints and its relatively larger impact on trade-intensive sectors. A portion of the trade decline remains unexplained, which may reflect a possible breakdown in global supply chains. Looking ahead, the pace of normalisation in financial conditions and the future evolution of global supply integration will affect the speed of recovery in trade and global output. Comprendre l'effondrement du commerce mondial L’effondrement du volume des échanges mondiaux à la fin de 2008 et au début de 2009 est exceptionnel dans une perspective historique. Ce document montre que l’essentiel de cet effondrement peut s’expliquer par une baisse de la demande mondiale (à laquelle le commerce est devenu plus réactif au cours des dernières décennies), mais que le resserrement des conditions de crédit a probablement joué un rôle important. La raréfaction du crédit a vraisemblablement accéléré la chute du commerce via son impact sur le financement des échanges et son impact relativement plus prononcé sur les secteurs les plus intenses en commerce. Une partie de la chute du commerce demeure inexpliquée, et pourrait refléter une rupture de chaînes d'approvisionnement mondiales. Pour l'avenir, le rythme de la normalisation dans les conditions financières et de l’évolution future de l’intégration de la production mondiale affectera la vitesse de la reprise du commerce et de la production mondiale.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://dx.doi.org/10.1787/220821574732
Download Restriction: no

Bibliographic Info

Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 729.

as in new window
Length:
Date of creation: 30 Oct 2009
Date of revision:
Handle: RePEc:oec:ecoaaa:729-en

Contact details of provider:
Postal: 2 rue Andre Pascal, 75775 Paris Cedex 16
Phone: 33-(0)-1-45 24 82 00
Fax: 33-(0)-1-45 24 85 00
Email:
Web page: http://www.oecd.org
More information through EDIRC

Related research

Keywords: international trade; financial crisis; vertical supply; trade elasticity; élasticité du commerce; crise financière; intégration verticale; commerce international;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Stéphanie Guichard & Elena Rusticelli, 2011. "A Dynamic Factor Model for World Trade Growth," OECD Economics Department Working Papers 874, OECD Publishing.
  2. Ines Buono & Filippo Vergara Caffarelli, 2013. "Trade elasticity and vertical specialisation," Temi di discussione (Economic working papers) 924, Bank of Italy, Economic Research and International Relations Area.
  3. Janet Ceglowski, 2014. "Has Trade Become More Responsive to Income? Assessing the Evidence for US Imports," Open Economies Review, Springer, vol. 25(2), pages 225-241, April.
  4. Escaith, Hubert & Lindenberg, Nannette & Miroudot, Sébastien, 2010. "International Supply Chains and Trade Elasticity in Times of Global Crisis," MPRA Paper 20478, University Library of Munich, Germany.
  5. Kei-Mu Yi & Rudolfs Bems & Robert C. Johnson, 2010. "Demand Spillovers and the Collapse of Trade in the Global Recession," IMF Working Papers 10/142, International Monetary Fund.
  6. Joseph W. Gruber & Filippo di Mauro & Bernd Schnatz & Nico Zorell, 2011. "Where are global and U.S. trade heading in the aftermath of the trade collapse: issues and alternative scenarios," International Finance Discussion Papers 1017, Board of Governors of the Federal Reserve System (U.S.).
  7. van Bergeijk, P.A.G., 2011. "One is not enough! Understanding world trade collapses," ISS Working Papers - General Series 521, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  8. Nikolaos Antonakakis, 2012. "The Great Synchronization of International Trade Collapse," Department of Economics Working Papers wuwp142, Vienna University of Economics, Department of Economics.
  9. Roberto Golinelli & Giuseppe Parigi, 2013. "Tracking world trade and GDP in real time," Temi di discussione (Economic working papers) 920, Bank of Italy, Economic Research and International Relations Area.
  10. Guido Cazzavillan & Michael Donadelli, 2010. "Understanding the Global Demand Collapse: Empirical Analysis and Optimal Policy Response," Working Papers 2010_18, Department of Economics, University of Venice "Ca' Foscari".
  11. Daria Taglioni & Veronika Zavacka, 2012. "Innocent bystanders: How foreign uncertainty shocks harm exporters," Working Papers 149, European Bank for Reconstruction and Development, Office of the Chief Economist.
  12. Gherghina Virgil & Gherghina Georgeta, 2011. "The role of intermediates in the EU-business collapse: cause, effect or both," Constanta Maritime University Annals, Constanta Maritime University, vol. 16(2), pages 45-50.
  13. Magdolna Sass & Miklos Szanyi, 2012. "Two essays on Hungarian relocations," IEHAS Discussion Papers 1223, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  14. Anderton, Robert & Tewolde, Tadios, 2011. "The global financial crisis: trying to understand the global trade downturn and recovery," Working Paper Series 1370, European Central Bank.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:oec:ecoaaa:729-en. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.