Demand Spillovers and the Collapse of Trade in the Global Recession

WPIEA2010142 Image
Price:  $18.00

Author/Editor: Kei-Mu Yi, Rudolfs Bems, Robert C. Johnson
Release Date: © June, 2010
ISBN : 978-1-45520-125-9
Stock #: WPIEA2010142
Stock Status: On back-order

Languages and formats available



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.

More publications in this series: Working Papers

More publications by: Kei-Mu Yi ; Rudolfs Bems ; Robert C. Johnson