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The Slowdown in Global Trade: A Symptom of A Weak Recovery

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Listed:
  • Aqib Aslam
  • Emine Boz
  • Eugenio M Cerutti
  • Marcos Poplawski Ribeiro
  • Petia Topalova

Abstract

Global trade growth has slowed since 2012 relative both to its strong historical performance and to overall economic growth. This paper aims to quantify the role of weak economic growth and changes in its decomposition in accounting for the slowdown in trade using a reduced form and a structural approach. Both analytical investigations suggest that the overall weakness in economic activity, particularly investment, has been the primary restraint on trade growth, accounting for over 80 percent of the decline in the growth of the volume of goods trade between 2012–16 and 2003–07. However, other factors are also weighing on trade in recent years, especially in emerging market and developing economies, as evidenced by the non-negligible role attributed to trade costs by the structural approach.

Suggested Citation

  • Aqib Aslam & Emine Boz & Eugenio M Cerutti & Marcos Poplawski Ribeiro & Petia Topalova, 2017. "The Slowdown in Global Trade: A Symptom of A Weak Recovery," IMF Working Papers 17/242, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:17/242
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    5. Abdul Abiad & Prachi Mishra & Petia Topalova, 2014. "How Does Trade Evolve in the Aftermath of Financial Crises?," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 62(2), pages 213-247, June.
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    8. Timmer, Marcel P. & Los, Bart & Stehrer, Robert & de Vries, Gaaitzen J., 2016. "An Anatomy of the Global Trade Slowdown based on the WIOD 2016 Release," GGDC Research Memorandum GD-162, Groningen Growth and Development Centre, University of Groningen.
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    12. Patrice Ollivaud & Cyrille Schwellnus, 2015. "Does the post-crisis weakness of global trade solely reflect weak demand?," OECD Journal: Economic Studies, OECD Publishing, vol. 2015(1), pages 269-267.
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    Cited by:

    1. Guillaume Gaulier & Aude Sztulman & Deniz Ünal, 2019. "Are global value chains receding? The jury is still out. Key findings from the analysis of deflated world trade in parts and components," Working Papers DT/2019/03, DIAL (Développement, Institutions et Mondialisation).
    2. repec:pal:imfecr:v:66:y:2018:i:3:d:10.1057_s41308-018-0060-x is not listed on IDEAS

    More about this item

    Keywords

    Economic growth; International trade; Globalization; Investment; Trade policy; General; Country and Industry Studies of Trade; Trade Forecasting and Simulation; International Business Cycles;

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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