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Understanding the dynamics of export in the short run. The role of foreign and global shocks

Author

Listed:
  • Paweł R. Galiński

    (Narodowy Bank Polski
    SGH Warsaw School of Economics)

  • Jakub Mućk

    (Narodowy Bank Polski
    SGH Warsaw School of Economics)

Abstract

This paper introduces a novel Bayesian SVAR framework to identify the short-run drivers of export fluctuations across 18 EU economies, focusing on transmission through Global Value Chains (GVCs). By applying shock identification via sign restrictions within a hierarchical block exogeneity structure (domestic, foreign, and global), we offer four key insights. First, we show that while the Great Trade Collapse was primarily driven by global demand and uncertainty, the COVID-19 crisis involved a complex confluence of non-domestic demand and supply shocks. Second, tight integration within European production networks does not shield these economies from global structural shocks, which remain the primary drivers of export variance. Third, we provide evidence that trade openness and participation in investment-specific GVCs heighten the sensitivity of domestic exports to global shocks, particularly through cost-push mechanisms in backward linkages, while shorter GVC forward linkages tend to reduce this exposure.

Suggested Citation

  • Paweł R. Galiński & Jakub Mućk, 2026. "Understanding the dynamics of export in the short run. The role of foreign and global shocks," NBP Working Papers 387, Narodowy Bank Polski.
    • Handle: RePEc:nbp:nbpmis:387
    Note: We would like to thank participants at the NBP (Narodowy Bank Polski), BBK (Deutsche Bundesbank), CNB (Czech National Bank) and ECB (European Central Bank) seminars for useful comments and discussions. The views expressed herein belong to the authors and have not been endorsed by Narodowy Bank Polski.
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    References listed on IDEAS

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    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F60 - International Economics - - Economic Impacts of Globalization - - - General

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