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Trade Crisis? What Trade Crisis?

  • Kristian Behrens

    (Université du Québec à Montrëal CIRPEE, and CEPR)

  • Gregory Corcos

    (Norwegian School of Economics and Business Administration)

  • Giordano Mion

    (London School of Economics, CEP, CEPR, and SERC)

We investigate the 2008–2009 trade collapse using microdata from a small open economy, Belgium. Belgian exports and imports mostly fell because of smaller quantities sold and unit prices charged rather than fewer firms, trading partners, and products being involved in trade. Our difference-in-difference results point to a fall in the demand for tradables as the main driver of the collapse. Finance and involvement in global value chains played a minor role. Firm-level exports-to-turnover and imports-to-intermediates ratios reveal a comparable collapse of domestic and cross-border operations. Overall, our results reject a crisis of cross-border trade per se. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Article provided by MIT Press in its journal Review of Economics and Statistics.

Volume (Year): 95 (2013)
Issue (Month): 2 (May)
Pages: 702-709

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Handle: RePEc:tpr:restat:v:95:y:2013:i:2:p:702-709
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  1. Virgiliu Midrigan & Joseph Kaboski & George Alessandria, 2010. "The Great Trade Collapse of 2008-09: An Inventory Adjustment?," 2010 Meeting Papers 107, Society for Economic Dynamics.
  2. David S. Jacks & Christopher M. Meissner & Dennis Novy, 2009. "Trade Booms, Trade Busts, and Trade Costs," NBER Working Papers 15267, National Bureau of Economic Research, Inc.
  3. Kristian Behrens & Gregory Corcos & Giordano Mion, 2011. "Trade Crisis ? What Trade Crisis ?," Cahiers de recherche 1117, CIRPEE.
  4. Amiti, Mary & Weinstein, David E., 2009. "Exports and Financial Shocks," CEPR Discussion Papers 7590, C.E.P.R. Discussion Papers.
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