The Global Trade Slowdown: Cyclical or Structural?

By C. Constantinescu, Aaditya Mattoo, Michele Ruta. Social Science Research Network, 2015

247 citations recorded by the source corpus.

This paper focuses on the sluggish growth of world trade relative to income growth in recent years. The analysis uses an empirical strategy based on an error correction model to assess whether the global trade slowdown is structural or cyclical. An estimate of the relationship between trade and income in the past four decades reveals that the long-term trade elasticity rose sharply in the 1990s, but declined significantly in the 2000s even before the global financial crisis. These results suggest that trade is growing slowly not only because of slow growth of gross domestic product, but also because of a structural change in the trade-gross domestic product relationship in recent years. The available evidence suggests that the explanation may lie in the slowing pace of international vertical specialization rather than increasing protection or the changing composition of trade and gross domestic product.

Subfields: Economics and Econometrics, Political Science and International Relations

View Paper: https://www.semanticscholar.org/paper/ed3de10e66bf5a5c742632f4f3c78f1a4c7ad9d1

Citations in the corpus

• State capitalism in international context: Varieties and variations (2020, unknown): “Even before the 2020 pandemic, there was a slowdown in global trade (Constantinescu, Mattoo, & Ruta, 2020).”
• The COVID‐19 Pandemic and Its Impact on the Global Economy: What Does It Take to Turn Crisis into Opportunity? (2020, unknown): “Constantinescu et al. (2015) find that the global trade slowdown is structural rather than cyclical.”
• Depreciations without exports ? global value chains and the exchange rate elasticity of exports (2015, unknown): “10 (Constantinescu et al., 2015).”