International Trade by Production Stage: What’s Real?

The intensity of global value chains can be proxied by the share of intermediate goods in world trade. This indicator is however affected by price effects, which were particularly strong during the recent inflation episode of the early 2020s. To neutralize these price effects, we compute price deflators by production stage, obtaining series of trade in volume. The deflated series reveal that the share of intermediate goods in world trade is relatively stable since the early 2000s. If anything, trade in parts and components, a key feature of global value chains, seems slightly more dynamic than other production stages. Our results further show that parts and components, as well as capital goods, experienced the fastest trend growth between 2000 and 2023, while primary goods lagged behind. Finally, trade volumes appear strongly procyclical overall, except for primary goods, which display no significant correlation with the global output gap.