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

38 Pages Posted: 1 Feb 2018

See all articles by Aqib Aslam

Aqib Aslam

International Monetary Fund (IMF) - Research Department

Emine Boz

International Monetary Fund (IMF)

Eugenio Cerutti

International Monetary Fund (IMF); Johns Hopkins University

Marcos Poplawski-Ribeiro

International Monetary Fund (IMF)

Petia B. Topalova

International Monetary Fund (IMF)

Date Written: November 2017

Abstract

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.

Keywords: Economic growth, International trade, Globalization, Investment, Trade policy, General, Country and Industry Studies of Trade, Trade Forecasting and Simulation, International Business Cycles

JEL Classification: F10, F40, F14, F17, F44, F4

Suggested Citation

Aslam, Aqib and Boz, Emine and Cerutti, Eugenio and Poplawski-Ribeiro, Marcos and Topalova, Petia B., The Slowdown in Global Trade: A Symptom of a Weak Recovery (November 2017). IMF Working Paper No. 17/242. Available at SSRN: https://ssrn.com/abstract=3116200

Aqib Aslam

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Emine Boz

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Eugenio Cerutti

International Monetary Fund (IMF) ( email )

700 19th Street N.W.
Washington, DC 20431
United States

Johns Hopkins University ( email )

Baltimore, MD 21218
United States

Marcos Poplawski-Ribeiro

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Petia B. Topalova (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street N.W.
Washington, DC 20431
United States

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