The Slowdown in Global Trade: A Symptom of A Weak Recovery

By Aqib Aslam, Emine Boz, Eugenio M Cerutti, Marcos Poplawski Ribeiro, Petia Topalova

November 15, 2017

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Aqib Aslam, Emine Boz, Eugenio M Cerutti, Marcos Poplawski Ribeiro, and Petia Topalova. The Slowdown in Global Trade: A Symptom of A Weak Recovery, (USA: International Monetary Fund, 2017) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Global trade growth has slowed since 2012 relative both to its strong historical performance and to overall economic growth. This paper aims to quantify the role of weak economic growth and changes in its decomposition in accounting for the slowdown in trade using a reduced form and a structural approach. Both analytical investigations suggest that the overall weakness in economic activity, particularly investment, has been the primary restraint on trade growth, accounting for over 80 percent of the decline in the growth of the volume of goods trade between 2012–16 and 2003–07. However, other factors are also weighing on trade in recent years, especially in emerging market and developing economies, as evidenced by the non-negligible role attributed to trade costs by the structural approach.

Subject: Emerging and frontier financial markets, Exports, Financial markets, Imports, International trade, National accounts, Real imports, Trade balance

Keywords: Demand, Emerging and frontier financial markets, Exports, Global, Globalization, Import demand model, Import growth, Import share, Import-intensity-adjusted demand, Imports, International Trade, Investment, Real imports, Trade balance, Trade cost, Trade growth, Trade Policy, Trade slowdown, World goods trade volume growth, WP

Publication Details

Pages:

37
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2017/242
Stock No:

WPIEA2017242
ISBN:

9781484328279
ISSN:

1018-5941

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