Decomposing the Great Trade Collapse : Products, Prices, and Quantities in the 2008–2009 Crisis
The authors identifies a new set of stylized facts on the 2008-2009 trade collapse that they hope can be used to shed light on the importance of demand and supply-side factors in explaining the fall in trade. In particular, they decompose the fall...
| Main Authors: | , , |
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| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110803085326 http://hdl.handle.net/10986/3511 |
| Summary: | The authors identifies a new set of
stylized facts on the 2008-2009 trade collapse that they
hope can be used to shed light on the importance of demand
and supply-side factors in explaining the fall in trade. In
particular, they decompose the fall in international trade
into product entry and exit, price changes, and quantity
changes for imports by Brazil, the European Union,
Indonesia, and the United States. When the authors aggregate
across all products, most of the countries analyzed
experienced a decline in new products, a rise in product
exit, and falls in quantity for product lines that continued
to be traded. The evidence suggests that the intensive
rather than extensive margin mattered the most, consistent
with studies of other countries and previous recessionary
periods. On average, quantities declined and prices fell.
However, these average effects mask enormous differences
across different products. Price declines were driven
primarily by commodities. Within manufacturing, while most
quantity changes were negative, in most cases price changes
moved in the opposite direction. Consequently, within
manufacturing, there is some evidence consistent with the
hypothesis that supply side frictions played a role. For the
United States, price increases were most significant in
sectors which are typically credit constrained. |
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