## _wp1078 — Section 5: Role of Trade Globalization in the Change of Spillovers

## Source details

**Canonical URL:** [_wp1078 — Section 5: Role of Trade Globalization in the Change of Spillovers](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2010/_wp1078.pdf)

## Other formats

- [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2010/_wp1078.pdf.md)
- [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2010/_wp1078.pdf.json)

---

### Introduction
- Context and extreme volatility during the recent crisis:
  - For the first ten months following the start of the crisis (in April 2008), industrial production fell at the same rate as in the Great Depression and global trade fell much faster.
  - Twenty months into the crisis, industrial production and trade were, respectively, 6 percent and 20 percent below their previous peaks.
  - Example: the German economy contracted by 5 percent in 2009.
- Framing and methodology:
  - Extends the Stock and Watson (2005) factor-structural VAR approach from G-7 to 22 OECD economies; data extended through the end of 2007 (analysis presented through end-2006).
- Three headline findings:
  - The reduction in output volatility apparently ceased in some advanced industrialized countries by the mid-1990s, with a mild tendency towards increased volatility in some countries (notably Japan and Germany).
  - The bottoming out and possible reversal of the decline in volatility was associated with an increased role for spillovers, starting sometime in the mid-1990s.
  - The increase was driven not primarily by larger spillover shocks but by increased sensitivity of countries to those shocks.

### Trends in Growth Volatility
- Data and filtering:
  - Quarterly logarithm of per capita real GDP series; sample starts in 1960; main analysis covers 1977:Q1–2006:Q4.
  - Detrending primarily via Baxter-King (1999) band pass (BP) filter with eight leads and lags and pass-band of 6-32 quarters.
  - Time-varying regressions estimated by weighted least squares with two-sided exponential weighting; weight for observation at s when evaluating date t is δ|t−s| with δ set to 0.97.
- Sample of 22 OECD countries: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan, Korea, Mexico, Netherlands, Norway, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States.
- Group patterns (1977–2006):
  - Group 1 (Australia, Austria, Belgium, France, Italy, Spain, UK): sustained decline in volatility since 1977; spillovers still important and by 2006 contributed about 50 percent of volatility for this group.
  - Group 2 (Canada, Finland, Norway): relatively low average volatility with mild tendency to decline; country-specific episodes (e.g., Finland) showed higher volatility at times.
  - Group 3 (Denmark, Germany, Japan, Netherlands, Sweden, Switzerland, US): high volatility in late 1970s, declined through mid-1990s, then tendency to increase—Germany and Japan notable.
  - Group 4 (Iceland, Ireland, Korea, Mexico, Turkey): volatility remained relatively high with large swings; spikes in late 1990s associated with emerging market financial crises.
- Robustness:
  - Adding a larger set of economies accentuates measured increases in volatility since the mid-1990s for some countries (e.g., Germany, Japan), consistent with stronger global linkages.

### Sources of Volatility: the Role of International Spillovers
- FSVAR decomposition setup:
  - VAR errors vt decomposed as vt = Γ f_t + ξ_t where f_t are common international factors and ξ_t are country-specific idiosyncratic shocks.
  - Adopts Stock and Watson (2005) two-factor model; parameters estimated by Gaussian maximum likelihood and variances via spectral decomposition.
  - Definition: common shocks affect all countries contemporaneously; spillovers are idiosyncratic shocks that affect other countries after one quarter.
- Core empirical result:
  - Robust increase in the contribution of spillovers to country volatility since the mid-1990s across country groups.
- Pattern across groups:
  - Group 1: overall volatility declined but spillovers remained important and rose to about 50 percent by 2006.
  - Group 2: domestic shocks declined while spillovers increased.
  - Group 3: the increase in volatility is largely attributable to increased spillovers.
  - Group 4: volatility and spillovers spiked in the late 1990s/early 2000s with emerging market crises; after abatement they resumed a moderate upward trend.
- Period averages (1977-1994 vs 1995-2007):
  - In the post-1995 period, at the 4- and 8-quarter horizons, the share of spillovers in forecast-error variance ranged between half and three-quarters for many countries, becoming the dominant source of volatility.
  - Increases in volatility in the second period observed for: Germany (8-quarter horizon), Iceland (1-, 2-, and 4-quarter horizons), Ireland (all horizons), Japan (2-, 4-, 8-quarter horizons), Korea (4- and 8-quarter horizons), Switzerland (4- and 8-quarter horizons), Turkey (2-, 4-, 8-quarter horizons).
- Sample-size effect:
  - A larger international sample tends to give larger measured shares of spillovers at a given point in time; authors argue the larger sample better captures global interconnections.

### More Spillovers or a Faster Response to Foreign Impulses?
- Decomposition identity:
  - For the variance component V_pj attributed to shock j in period p, V_pj = a_pj^2 σ_pj^2 where a_pj captures squared cumulative impulse response and σ_pj^2 is variance of shock j.
  - Change in variance decomposed into change due to shock variances (σ^2) and change due to impulse responses (a^2).
- Empirical findings (sample highlights from Table 2):
  - Shock variances declined over time in 20 out of 22 countries (decline in size of shocks).
  - Responses (impulse magnitudes) increased in 15 out of 22 countries; responses to spillover shocks increased in 17 out of 22 countries.
  - Where aggregate response increased, the increase often owes primarily to increased response to spillovers (examples: Germany and Japan).
- Counterfactual exercise:
  - Counterfactual volatility for 1995-2007 computed using 1995-2007 transmission parameters but shock variances from 1977-1994 shows that, absent the change in the spillover response, volatility in the second period would have been substantially lower—indeed, would have increased less and declined in some countries.

### Interpreting the Results
- Proposed mechanism: rise of vertical specialization in trade
  - Vertical specialization defined: countries specialize in particular stages of production; import content of exports rises (Yi, 2003).
  - Vertical specialization responds non-linearly to reductions in trade costs and can produce sizeable and speedy spillovers.
- Role of emerging markets and timing:
  - Early- to mid-1990s acceleration of vertical specialization coincides with the increased share and speed of spillovers estimated in the paper.
  - Examples provided:
    - Mexico’s integration with U.S. parent companies increased leading up to and after NAFTA (NAFTA came into force in 1994).
    - China: imports accounted for about half of Chinese exports between 1997 and 2006.
    - Germany: import share of German exports rose from 27 percent in 1991 to 39 percent in 2002.
- Statistical associations:
  - Increase in vertical specialization between 1995 and 2000 is positively related to an increase in the share of spillovers across countries: OLS reported with t-statistic 1.56 and R² = 0.13 for an 18-country sample (vertical-specialization data available).
  - Increase in trade openness (exports + imports over GDP) also positively related to increases in spillovers but relationship weaker: R² = 0.08 in the reported OLS.

### Implications for the 2008–09 Crisis
- Vertical specialization can unwind non-linearly and rapidly, helping explain the precipitous fall in trade and amplification of the downturn during the crisis.
- Financial shocks likely the original source, with vertical specialization transmitting shocks quickly into the global real economy.

### Conclusions and Policy Implications
- Summary conclusion:
  - Domestic shocks declined in size (consistent with domestic policy improvements and private-sector innovations), but increased global integration—especially via vertical specialization—raised countries’ sensitivity to foreign shocks and the speed and scope of spillovers.
- Policy lessons and recommendations:
  - Imbalances or shocks in one country have increasingly important implications for others; the magnitude of these international effects is increasing.
  - Vertical specialization is welfare-enhancing in benign times but can amplify downturns rapidly.
  - Ex post coordinated responses (financial, monetary, fiscal) were used during the recent crisis; ex ante, countries have a stake in the policy stances of others.
  - Continued efforts to improve transparency and policy coordination (e.g., under the G-20 and within the European Union) are important.
  - Sensible economic policies in each country remain central for ex ante mitigation of global spillover risks.

*Source: IMF Working Paper (Section 5), canonical source URL: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2010/_wp1078.pdf*

### References .............................................................................................................

### _wp1078 - References

### Main sections
- References ................................................................................................................................23
- Appendix ..................................................................................................................................26

### Tables
- 1. Variance Decompositions Based on the Two-Factor Structural VAR: Common  
  Shocks, Spillovers and Own-Country Shocks .............................................................14
- 2. Then and Now—Were the Shocks Larger or the Transmission Different? ....................17

### Figures
- 1. Volatility of Real Output Growth .....................................................................................8
- 2. Evolution of Output Growth Volatility in the Main Industrialized Countries:  
  Different Samples ........................................................................................................10
- 3. Real GDP Growth Volatility and its Main Sources ........................................................12
- 4. Actual and Counterfactual Volatility for 1995-2007 ......................................................19

*Source: _wp1078 - References (PDF).*

### 5. Role of Trade Globalization in the Change of Spillovers ...............................................21

### 5. Role of Trade Globalization in the Change of Spillovers

### Introduction
- Context and recent extreme volatility:
  - For the first ten months following the start of the crisis (in April 2008), industrial production fell at the same rate as in the Great Depression and global trade fell much faster.
  - Twenty months into the crisis, industrial production and trade were, respectively, 6 percent and 20 percent below their previous peaks.
  - Example: the German economy contracted by 5 percent in 2009.
- Framing and methodology:
  - The paper deploys and extends the Stock and Watson (2005) factor-structural VAR approach, expanding the sample from the G-7 to 22 OECD economies and extending data through the end of 2007 (analysis presented through end-2006).
- Three main findings (stated in the paper):
  - The reduction in output volatility apparently ceased in some advanced industrialized countries by the mid-1990s, with a mild tendency towards increased volatility in some countries (notably Japan and Germany).
  - The bottoming out and possible reversal of the decline in volatility was associated with an increased role for spillovers, starting sometime in the mid-1990s.
  - The increase was driven not primarily by larger spillover shocks but by increased sensitivity of countries to those shocks.

### Trends in Growth Volatility
- Data and filtering:
  - Quarterly logarithm of per capita real GDP series, sample starts in 1960; main analysis covers 1977:Q1–2006:Q4.
  - Detrending primarily via Baxter-King (1999) band pass (BP) filter with eight leads and lags and pass-band of 6-32 quarters.
  - Time-varying regressions estimated by weighted least squares with two-sided exponential weighting; weight for observation at s when evaluating date t is δ|t−s| with δ set to 0.97.
- Sample of 22 OECD countries used in analysis:
  - Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan, Korea, Mexico, Netherlands, Norway, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States.
- Group patterns (1977–2006):
  - Group 1 (Australia, Austria, Belgium, France, Italy, Spain, UK): sustained decline in volatility since 1977; spillovers still important and by 2006 contributed about 50 percent of volatility for this group.
  - Group 2 (Canada, Finland, Norway): relatively low average volatility with mild tendency to decline; country-specific episodes (e.g., Finland) showed higher volatility at times.
  - Group 3 (Denmark, Germany, Japan, Netherlands, Sweden, Switzerland, US): high volatility in late 1970s, declined through mid-1990s, then tendency to increase—Germany and Japan notable.
  - Group 4 (Iceland, Ireland, Korea, Mexico, Turkey): volatility remained relatively high with large swings; spikes in late 1990s associated with emerging market financial crises.
- Robustness:
  - Adding a larger set of economies accentuates measured increases in volatility since the mid-1990s for some countries (e.g., Germany, Japan), consistent with stronger global linkages.

### Sources of Volatility: the Role of International Spillovers
- FSVAR decomposition:
  - VAR errors vt decomposed as vt = Γ f_t + ξ_t where f_t are common international factors and ξ_t are country-specific idiosyncratic shocks.
  - Stock and Watson (2005) two-factor model adopted; parameters estimated by Gaussian maximum likelihood and variances via spectral decomposition.
  - Definition in decomposition: common shocks affect all countries contemporaneously; spillovers are idiosyncratic shocks that affect other countries after one quarter.
- Core empirical result:
  - A robust increase in the contribution of spillovers to country volatility since the mid-1990s across country groups.
  - Pattern across groups:
    - Group 1: overall volatility declined but spillovers remained important and rose to about 50 percent by 2006.
    - Group 2: domestic shocks declined while spillovers increased.
    - Group 3: the increase in volatility is largely attributable to increased spillovers.
    - Group 4: volatility and spillovers spiked in the late 1990s/early 2000s with emerging market crises; after abatement they resumed a moderate upward trend.
- Period averages (1977-1994 vs 1995-2007):
  - In the post-1995 period, at the 4- and 8-quarter horizons, the share of spillovers in forecast-error variance ranged between half and three-quarters for many countries, becoming the dominant source of volatility.
  - Table highlights (paper): increases in volatility in the second period observed for Germany (8-quarter horizon), Iceland (1-, 2-, and 4-quarter horizons), Ireland (all horizons), Japan (2-, 4-, 8-quarter horizons), Korea (4- and 8-quarter horizons), Switzerland (4- and 8-quarter horizons), Turkey (2-, 4-, 8-quarter horizons).
- Sample-size effect:
  - A larger international sample tends to give larger measured shares of spillovers at a given point in time; authors argue the larger sample better captures global interconnections.

### More Spillovers or a Faster Response to Foreign Impulses?
- Decomposition approach:
  - For the variance component V_pj attributed to shock j in period p, V_pj = a_pj^2 σ_pj^2 where a_pj captures squared cumulative impulse response and σ_pj^2 is variance of shock j.
  - Change in variance decomposed into change due to shock variances (σ^2) and change due to impulse responses (a^2).
- Empirical findings (Table 2 summary):
  - Shock variances declined over time in 20 out of 22 countries (decline in size of shocks).
  - Responses (impulse magnitudes) increased in 15 out of 22 countries; responses to spillover shocks increased in 17 out of 22 countries.
  - Where aggregate response increased, the increase often owes primarily to increased response to spillovers (examples: Germany and Japan).
- Counterfactual exercise:
  - Counterfactual volatility for 1995-2007 computed using 1995-2007 transmission parameters but shock variances from 1977-1994 shows that, absent the change in the spillover response, volatility in the second period would have been substantially lower—indeed, would have increased less and declined in some countries.

### Interpreting the Results
- Proposed mechanism: rise of vertical specialization in trade
  - Vertical specialization: countries specialize in particular stages of production; import content of exports rises (Yi, 2003).
  - Vertical specialization responds non-linearly to reductions in trade costs and can produce sizeable and speedy spillovers.
- Role of emerging markets and timing:
  - Early- to mid-1990s acceleration of vertical specialization coincides with the increased share and speed of spillovers estimated in the paper.
  - Examples:
    - Mexico’s integration with U.S. parent companies increased leading up to and after NAFTA (NAFTA came into force in 1994).
    - China: imports accounted for about half of Chinese exports between 1997 and 2006 (Koopman, Wang, and Wei, 2008)—reflecting importance of “processing” exports.
    - Eastern Europe emerged as suppliers for Germany; Sinn (2006) reports an increase in the import share of German exports from 27 percent in 1991 to 39 percent in 2002.
- Statistical associations:
  - Increase in vertical specialization between 1995 and 2000 is positively related to an increase in the share of spillovers across countries (OLS regression reported with t-statistic 1.56 and R² = 0.13 for 18-country sample where vertical-specialization data are available).
  - Increase in trade openness (exports + imports over GDP) also positively related to increases in spillovers but the relationship is weaker than for vertical specialization (R² = 0.08 in the reported OLS).
- Implications for the 2008-09 crisis:
  - Vertical specialization can unwind non-linearly and rapidly, which helps explain the precipitous fall in trade and amplification of the downturn during the crisis.
  - Financial shocks likely the original source, with vertical specialization transmitting shocks quickly into the global real economy.

### Conclusions and Policy Implications
- Summary conclusion:
  - Domestic shocks declined in size (consistent with domestic policy improvements and private-sector innovations), but increased global integration—especially via vertical specialization—raised countries’ sensitivity to foreign shocks and the speed and scope of spillovers.
- Policy lessons:
  - Imbalances or shocks in one country have increasingly important implications for others; the magnitude of these international effects is increasing.
  - Vertical specialization is welfare-enhancing in benign times but can amplify downturns rapidly.
  - Ex post coordinated responses (financial, monetary, fiscal) were used during the recent crisis; ex ante, countries have a stake in the policy stances of others.
  - Continued efforts to improve transparency and policy coordination (e.g., under the G-20 and within the European Union) are important.
  - Ultimately, sensible economic policies in each country remain central for ex ante mitigation of global spillover risks (Obstfeld and Rogoff, 2002).

*Source: IMF Working Paper (Section 5), canonical source URL: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2010/_wp1078.pdf*

### REFERENCES

### REFERENCES (excerpt)

### Key studies on business cycle volatility and the Great Moderation
- Baxter, Marianne, and Robert C. King, 1999, “Measuring Business Cycles, Approximate Band-Pass Filters for Economic Time Series,” The Review of Economics and Statistics, vol. 81(4) pp. 575-93.
- Bernanke, Ben, 2004, “The Great Moderation,” remarks at the 2004 Eastern Economic Association meetings, Washington D.C., available on the internet at: http://www.federalreserve.gov/Boarddocs/Speeches/2004/20040220/default.htm.
- Blanchard, Olivier, and John Simon, 2001, “The Long and Large Decline in U.S. Output Volatility,” Brookings Papers on Economic Activity, 1, pp. 135-64.
- Cechetti, Stephen, Alfonso Flores-Lagunes, and Stefan Krause, 2006, “Assessing the Sources of Changes in the Volatility of Real Growth,” NBER Working Paper no. 11946, January.
- Gali, Jordi, and Luca Gambetti, 2009, “On the Sources of the Great Moderation,” American Economic Journal: Macroeconomics, 1(1), pp. 26-57.
- Giannone, Domenico, Michèle Lenza, and Lucrezia Reichlin, 2008, “Explaining the Great Moderation: It is Not the Shocks,” Journal of the European Economic Association, 6(2-3), pp. 621-33.
- Kim, Chang-Jin, and Charles Nelson, 1999, “Has the U.S. Economy Become More Stable? A Bayesian Approach Based on a Markov-Switching Model of the Business Cycle,” Review of Economics and Statistics, 81, pp. 608-16.
- McConnell, Margaret, and Gabriel Perez-Quiros, 2000, “Output Fluctuations in the United States: What Has Changed since the Early 1980s?” American Economic Review, 90, pp. 1464-76.
- Stock, James, and Mark Watson, 2005, “Understanding Changes in International Business Cycle Dynamics,” Journal of the European Economic Association, (50), pp. 968-1006.

### Trade, vertical specialization, and value-added in exports
- Breda, Emanuele, Rita Cappariello, and Roberta Zizza, 2008, “Vertical Specialisation in Europe: Evidence from The Import Content Of Exports,” Bank of Italy Working Paper 682.
- Hummels D., J. Ishii, and K. Yi, 2001, “The Nature and Growth of Vertical Specialization in World Trade,” Journal of International Economics, 54, pp. 75-96.
- Yi, Kei-Mu, 2003, “Can Vertical Specialization Explain the Growth of World Trade?” The Journal of Political Economy 111(1), pp. 52-102.
- Koopman, Robert, Zhi Wang, and Shang-Jin Wei, 2008, How Much Of Chinese Exports Is Really Made In China? Assessing Domestic Value-Added When Processing Trade Is Pervasive, NBER Working Paper 14109, http://www.nber.org/papers/w14109.
- Yi, Kei-Mu, 2009, “The Collapse of Global Trade: The Role of Vertical Specialisation,” in Richard Baldwin and Simon Evenett, eds., The Collapse Of Global Trade, Murky Protectionism, And The Crisis: Recommendations For The G20, A Voxeu.Org Publication.
- Levchenko Andrei A., Logan Lewis, Linda L. Tesar, 2009, “The Collapse of International Trade During the 2008-2009 Crisis: In Search of the Smoking Gun,” Gerald R. Ford School of Public Policy, The University of Michigan, Ann Arbor, Michigan 48109-3091, Discussion Paper No. 592.

### International transmission, financial linkages, and crises
- Burstein, Ariel, Christopher Kurz, and Linda Tesar, 2008, “Trade, production sharing, and the international transmission of business cycles,” Journal of Monetary Economics, 55, pp. 775–795.
- Eichengreen, Barry, Ashoka Mody, Milan Nedeljkovic, and Lucio Sarno, 2009, “How the Subprime Crisis Went Global: Evidence from Bank Credit Default Swap Spreads,” NBER Working Paper No. w14904.
- Eichengreen, Barry and Kevin O’Rourke, 2010, “What to the Data Tell Us? VoxEU.org, http://www.voxeu.org/index.php?q=node/3421.
- Forbes, Kristin J., and Menzie D. Chinn, 2004, “A Decomposition of Global Linkages in Financial Markets Over Time,” Review of Economics and Statistics, 86(3, August), pp. 705-22.
- Mody, Ashoka, and Mark Taylor, 2007, “Regional Vulnerability: The Case of East Asia,” Journal of International Money and Finance, 26(8), pp. 1292-1310.
- Obstfeld, Maurice and Kenneth Rogoff, 2002, “Source Global Implications of Self-Oriented National Monetary Rules,” The Quarterly Journal of Economics, 117(2), pp. 503-535.

### Other empirical and theoretical contributions
- Cesaroni, Tatiana, Louis Maccini, and Marco Malgarini, 2009, “Business Cycle Volatility and Inventories Behavior: New Evidence for the Euro Area,” Institute for Studies and Economic Analyses Working Paper no. 108.
- Fogli, Alessandra, and Fabrizio Perri, 2009, “Macroeconomic Volatility and the External Imbalances,” unpublished.
- Jaimovich, Nir, and Henry Siu, 2009, “The Young, the Old, and the Restless: Demographics and Business Cycle Volatility,” American Economic Review, 99 (3) pp. 804-26.
- Kose, M. Ayhan, Christopher Otrok, and Eswar S. Prasad, 2008, “Global Business Cycles: Convergence or Decoupling?” IMF Working Paper WP/08/143.
- Kose Ayhan, Christopher Otrok, and Charles H. Whiteman, 2005, “Understanding the Evolution of World Business Cycles,” IMF Working Paper WP/05/211.
- Levchenko Andrei A., Logan Lewis, Linda L. Tesar, 2009, “The Collapse of International Trade During the 2008-2009 Crisis: In Search of the Smoking Gun,” Gerald R. Ford School of Public Policy, The University of Michigan, Ann Arbor, Michigan 48109-3091, Discussion Paper No. 592.
- Sinn, Hans-Werner, 2006, “The Pathological Export Boom and The Bazaar Effect—How To Solve The German Puzzle,” Cesifo Working Paper No. 1708.

### Appendix: Figures — GDP Growth Volatility and Decomposition by Country
- Figure A1. Group 1: GDP Growth Volatility and its Decomposition by Country — country panels include Italy, Australia, Belgium, France, UK, Austria, Spain, Canada, Norway, Finland. Each panel plots series labeled: Tot al, Common+Spillovers, Common with vertical axis ticks at 0.0, 2.0, 4.0, 6.0, 8.0, 10.0 and quarterly x-axis from 1977Q1 to 2004Q1.
- Figure A2. Group 2: GDP Growth Volatility and its Decomposition by Country — country panels include Japan, Denmark, Sweden, Germany, Netherlands, Switzerland, US. Each panel plots series labeled: Tot al, Common+Spillovers, Common with vertical axis ticks at 0.0, 2.0, 4.0, 6.0, 8.0, 10.0 and quarterly x-axis from 1977Q1 to 2004Q1.
- Figure A3. Group 3: GDP Growth Volatility and its Decomposition by Country — country panels include Iceland, Ireland, Korea, Mexico, Turkey. Panels show series labeled Tot al, Common+Spillovers, Common; Turkey panel includes two right-axis series labeling: Total (right axis), Common+Spillovers (right axis); vertical axis ticks vary up to 32.0 in one panel, and standard 0.0–10.0 in others, with quarterly x-axis from 1977Q1 to 2004Q1.
- Figure A4. Group 4: GDP Growth Volatility and its Decomposition by Country — (figure referenced; content continues in Appendix).

*Source: _wp1078 - REFERENCES (PDF chapter/section).*

---


_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2010/_wp1078.pdf_