Demand Spillovers and the Collapse of Trade in the Global Recession
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
This paper uses a global input-output framework to quantify US and EU demand spillovers and the elasticity of world trade to GDP during the global recession of 2008-2009. We find that 20-30 percent of the decline in the US and EU demand was borne by foreign countries, with NAFTA, Emerging Europe, and Asia hit hardest. Allowing demand to change in all countries simultaneously, our framework delivers an elasticity of world trade to GDP of nearly 3. Thus, demand alone can account for 70 percent of the trade collapse. Large changes in demand for durables play an important role in driving these results.
Series:
Working Paper No. 2010/142
Subject:
Demand elasticity Exports Imports North American Free Trade Agreement Trade in goods
English
Publication Date:
June 1, 2010
ISBN/ISSN:
9781455201259/1018-5941
Stock No:
WPIEA2010142
Pages:
45
Please address any questions about this title to publications@imf.org