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The great collapse in value added trade

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  • Nagengast, Arne J.
  • Stehrer, Robert

Abstract

This paper studies the great collapse in value added trade using a structural decomposition analysis. We show that changes in vertical specialisation accounted for almost half of the great trade collapse, while the previous literature on gross trade has mainly focused on final expenditure, inventory adjustment and adverse credit supply conditions. The decline in international production sharing during the crisis may partially account for the observed decrease in global trade elasticities in recent years. Second, we find that the drop in the overall level of demand accounted for roughly a quarter of the decline in value added exports while just under one third was due to compositional changes in final demand. Finally, we demonstrate that the dichotomy between services and manufacturing sectors observed in gross exports during the great trade collapse is not apparent in value added trade data.

Suggested Citation

  • Nagengast, Arne J. & Stehrer, Robert, 2015. "The great collapse in value added trade," Discussion Papers 47/2015, Deutsche Bundesbank.
  • Handle: RePEc:zbw:bubdps:472015
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    Cited by:

    1. João Amador & Sónia Cabral, 2017. "Networks of Value-added Trade," The World Economy, Wiley Blackwell, vol. 40(7), pages 1291-1313, July.
    2. Arne J. Nagengast & Robert Stehrer, 2016. "The Great Collapse in Value Added Trade," Review of International Economics, Wiley Blackwell, vol. 24(2), pages 392-421, May.
    3. repec:prg:jnlpol:v:2017:y:2017:i:5:id:1162:p:562-582 is not listed on IDEAS
    4. E. Dhyne & C. Duprez & C. Fuss, 2015. "Main CompNet research results," Economic Review, National Bank of Belgium, issue iii, pages 103-116, December.
    5. Buelens, Christian & Tirpák, Marcel, 2017. "Reading the Footprints: how foreign investors shape countries' participation in global value chains," Working Paper Series 2060, European Central Bank.
    6. Di Filippo, Gabriele, 2018. "What Place does Luxembourg hold in Global Value Chains?," MPRA Paper 86235, University Library of Munich, Germany.
    7. repec:krk:eberjl:v:5:y:2017:i:2:p:51-69 is not listed on IDEAS
    8. repec:spr:jhappi:v:18:y:2017:i:6:d:10.1007_s10902-016-9797-y is not listed on IDEAS

    More about this item

    Keywords

    Great trade collapse; Vertical specialisation; Trade in value added; Input-output tables; Structural decomposition analysis;

    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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