IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Trade, globalization and the financial crisis

  • Mark A. Wynne
  • Erasmus K. Kersting

The financial crisis that began in August 2007 and intensified in the fall of 2008 pushed the global economy into a severe downturn that some have called the Great Recession. The decline in trade and the protectionist instincts that invariably come to the fore in difficult economic times have raised concerns that today's crisis may lead to deglobalization. ; We will illustrate the crisis' impact on world trade and examine the typical patterns of international trade over the business cycle. We urge caution in using trade data to estimate the extent of globalization or deglobalization. And we present evidence that international trade has fallen by more than expected given the course of the current business cycle. ; This raises the question of what might have accounted for the excess decline. We look at two possibilities: first, a direct effect on trade flows associated with a drying up of trade finance at the height of the crisis; second, a breakout of protectionist measures. We conclude that trade finance is the most likely explanation. However, it's vitally important to remain vigilant to the risks of protectionism.

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://dallasfed.org/assets/documents/research/eclett/2009/el0908.pdf
Download Restriction: no

Article provided by Federal Reserve Bank of Dallas in its journal Economic Letter.

Volume (Year): 4 (2009)
Issue (Month): nov ()
Pages:

as
in new window

Handle: RePEc:fip:feddel:y:2009:i:nov:n:v.4no.8
Contact details of provider: Web page: http://www.dallasfed.org/
Email:


More information through EDIRC

Order Information: Email:


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

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

When requesting a correction, please mention this item's handle: RePEc:fip:feddel:y:2009:i:nov:n:v.4no.8. 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: (Amy Chapman)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.