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The Global Financial Crisis and Its Impact on Trade: The World and the European Emerging Economies


  • Robert Shelburne

    () (United Nations Economic Commission for Europe)


This paper describes how the global financial crisis of 2007-2010 impacted trade both globally and more specifically for the European emerging economies, which in terms of GDP decline, were the most negatively impacted economies in the world. Just as with GDP, the trade of the European emerging economies was more severely impacted by the crisis than the trade for other regions of the world; exports for over one half of these economies declined by more than 50 per cent between the third quarter of 2008 and the first quarter of 2009. Despite these large declines, the geographical and sectoral distribution of their trade remained relatively stable. Most of these economies adjusted to the shock with a currency depreciation of about 20 per cent. The current account deficits of many of these economies which were quite large prior to the crisis were reduced significantly. Although there were some increases in protectionist measures and they did have a beggar-thy-neighbor component, in many cases these measures reflected macroeconomic policy failures, especially regarding the coordination of fiscal stimulus programs, and may have been welfare improving second best policies. The crisis is unlikely to result in major design changes in the world trading system, although the opposite is true for the world financial system.

Suggested Citation

  • Robert Shelburne, 2010. "The Global Financial Crisis and Its Impact on Trade: The World and the European Emerging Economies," ECE Discussion Papers Series 2010_2, UNECE.
  • Handle: RePEc:ece:dispap:2010_2

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    File Function: First version, 2010
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    References listed on IDEAS

    1. Robert Shelburne, 2009. "Current account deficits in the new member states: Causes and consequences," Intereconomics: Review of European Economic Policy, Springer;German National Library of Economics;Centre for European Policy Studies (CEPS), vol. 44(2), pages 90-95, March.
    2. Robert Shelburne, 2008. "Current Account Deficits in European Emerging Markets," ECE Discussion Papers Series 2008_2, UNECE.
    3. Robert Shelburne, 2002. "Improving The Economic Performance Of The Global Economy," International Trade and Finance Association Conference Papers 1009, International Trade and Finance Association.
    4. Auboin, Marc & Meier-Ewert, Moritz, 2003. "Improving the availability of trade finance during financial crises," WTO Discussion Papers 2, World Trade Organization (WTO), Economic Research and Statistics Division.
    5. Dang, Hai-Anh & Knack, Stephen & Rogers, F. Halsey, 2013. "International aid and financial crises in donor countries," European Journal of Political Economy, Elsevier, vol. 32(C), pages 232-250.
    6. Robert Shelburne & Oksana Pidufala, 2006. "Evolving Trade Patterns in the CIS: The Role of Manufacturing," International Trade and Finance Association Conference Papers 1078, International Trade and Finance Association.
    7. Robert Shelburne, 2008. "Financing Development in the UNECE Emerging Markets," UNECE Annual Report Economic Essays 2008_2, UNECE.
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    Cited by:

    1. Karen Poghosyan & Evžen Kočenda, 2016. "Determinants of export sophistication: Evidence from Monte Carlo simulations," Working Papers 360, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    2. Peter H. Bent, 2018. "Recovery from Financial Crises in Peripheral Economies, 1870-1913," CEH Discussion Papers 07, Centre for Economic History, Research School of Economics, Australian National University.
    3. Marianne Baxter, 2017. "Robust Determinants of Bilateral Trade," 2017 Meeting Papers 591, Society for Economic Dynamics.
    4. Fabio Saracco & Riccardo Di Clemente & Andrea Gabrielli & Tiziano Squartini, 2015. "Detecting early signs of the 2007-2008 crisis in the world trade," Papers 1508.03533,, revised Jul 2016.

    More about this item


    international trade; European emerging economies; financial crisis; transition economies; CIS; Russia; caucasus; central Asia; trade protectionism; current account deficits;

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
    • P45 - Economic Systems - - Other Economic Systems - - - International Linkages


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