Nicolas Berman, José De Sousa, Philippe Martin, Thierry Mayer, 20 October 2012

With the Global Crisis came the Great Trade Collapse, a fall in world trade much larger than the fall in GDP. This column argues that one reason behind this is that time to ship magnifies the effect of financial crises on trade. The reason is that exporters react to the increased probability of default even more so the longer the time to ship.

Nicolas Berman, Philippe Martin, 22 April 2010

Sub-Saharan Africa’s low level of financial development meant that African banks were not directly involved in the credit crunch. But this column warns against rejoicing. If the cost of such low development is that African exporters are very dependent on external trade finance, then the real cost of the global crisis on Africa may actually be higher.

Kristian Behrens, Gregory Corcos, Giordano Mion, 21 March 2010

World trade fell dramatically during 2009, as widely documented on this site and elsewhere. But there has been little econometric analysis of the different explanations put forward. This column uses data from Belgium to argue that a fall in demand was the main culprit. It is not a trade crisis – it is a trade collapse.

Jean-Pierre Chauffour, Christian Saborowski, 23 January 2010

What saved trade from collapsing totally during the global crisis? This column argues that export credit agencies played a key role in stabilising the trade finance market, and thus helped reduce credit risks and allowed exporters to offer open account terms in competitive markets.

Mary Amiti, David Weinstein, 23 December 2009

Can the drying up of trade finance help explain the recent collapse in exports relative to output? This column looks at the effect that trade finance had on exports during the 1990s Japanese financial crisis using firm-level data. It suggests that the direct effect of declining bank health on exports caused at least a third of the decline in Japan’s exports at the time.

Richard Baldwin, Daria Taglioni, 14 November 2009

Global imbalances are shrinking at a fabulous rate. This column argues that these improvements are mostly illusory – the transitory side-effect of the greatest trade collapse the world has ever seen. A global recovery will almost surely return the US, Germany, China and others to their old paths.

Charlotte Emlinger, Antoine Berthou, 02 November 2009

The volume of world trade has plummeted with the global crisis. This column says that high-quality imports are more responsive to income changes than low-quality imports. This explains why world trade value fell faster during the crisis than world trade volume, which fell faster than GDP.

Caroline Freund, 03 July 2009

The collapse in trade has been unprecedentedly severe. This column examines potential explanations. While the global fragmentation of production has increased the responsiveness of trade flows to drops in demand, trade also responds more sharply to GDP during global slowdowns than during tranquil times.

Simon Evenett, 16 May 2009

Policymakers on both sides of the Atlantic have pointed to what they see as the "green shoots" of economic recovery. However, this column shows that the people who undertake international trade aren't taking a sanguine view about trade protectionism. Governments need to eschew all forms of beggar-thy-neighbour policy and follow the five steps described below. This is no time for premature self-congratulation on a victory over protectionism.

Kiyoyasu Tanaka, 07 May 2009

Global trade is collapsing at an unprecedented rate, but not evenly across the globe. This column argues that ‘vertical specialisation’ – the internationalisation of manufacturing supply chains – accounts for the amplification of Japan’s drop in trade. The good news is that once OECD countries start to recover, the amplification should work in reverse, boosting Japanese exports and imports at an accelerating rate.


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