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The Great Trade Collapse: A Horse Race of Competing Stories

Hakan Yilmazkuday

Florida International University

May 12, 2013

This paper compares the contribution of several competing stories to the decline of trade (with respect to production) in the U.S. during the economic crisis of late 2008 and 2009. A dynamic trade model that considers up to eleven possible shocks is introduced. The benchmark model and its variants are estimated using up to seven series of quarterly data including U.S. trade and production. The estimation results show that trade costs have contributed most to the Great Trade Collapse, while including inventories and intermediate-inputs trade is essential to match the data. Other considered shocks either have minor contributions or are econometrically insignificant.

Number of Pages in PDF File: 51

Keywords: Trade Collapse, Inventories, Export Costs, the U.S.

JEL Classification: E32, F12, F41

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Date posted: November 4, 2012 ; Last revised: May 13, 2013

Suggested Citation

Yilmazkuday, Hakan, The Great Trade Collapse: A Horse Race of Competing Stories (May 12, 2013). Available at SSRN: https://ssrn.com/abstract=2170589 or http://dx.doi.org/10.2139/ssrn.2170589

Contact Information

Hakan Yilmazkuday (Contact Author)
Florida International University ( email )
11200 SW 8th Street
Miami, FL 33199
United States
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