The OECD Recession and Developing Country Trade: A Global Simulation Analysis

IDS Bulletin, Vol. 40, No. 5, p. 14-27, 2009

Posted: 7 Feb 2010

See all articles by Sherman Robinson

Sherman Robinson

International Food Policy Research Institute (IFPRI)

Dirk Willenbockel

University of Sussex - Institute of Development Studies

Date Written: February 4, 2010

Abstract

International trade is one of the main channels through which the global financial crisis hits developing countries. The recession in the ‘global North’ triggered by the financial crisis and the resulting slowdown of growth in other major emerging economies will generate declines in demand for exports from developing countries, along with a reversal of the beneficial terms-of-trade trends that have favoured net exporters of primary commodities over the last few years. How these terms-of-trade effects affect economic performance and welfare in low-income countries depends on country-specific characteristics and require a differentiated analysis. We use a multi-region computable general equilibrium world trade model to gauge the impact of a slowdown in the Organization for Economic Co-operation and Development (OECD) on the rest of the world, with a particular focus on the least developed countries. The analysis aims to identify the characteristics of regions most vulnerable to adverse global crisis impacts via the trade channel.

Keywords: Global financial crisis, trade, computable general equilibrium, least developed countries

JEL Classification: D58, F17, F47

Suggested Citation

Robinson, Sherman and Willenbockel, Dirk, The OECD Recession and Developing Country Trade: A Global Simulation Analysis (February 4, 2010). IDS Bulletin, Vol. 40, No. 5, p. 14-27, 2009, Available at SSRN: https://ssrn.com/abstract=1548016

Sherman Robinson

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Dirk Willenbockel (Contact Author)

University of Sussex - Institute of Development Studies ( email )

Brighton
Falmer, Brighton, East Sussex BN1 9RE
United Kingdom

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