Why Has World Trade Grown Faster than World Output?

11 Pages Posted: 7 Apr 2005

See all articles by Maria Barriel

Maria Barriel

Bank of England - Monetary Analysis

Mark Dean

Brown University - Department of Economics; New York University (NYU) - Department of Economics

Abstract

Between 1980 and 2002, world trade has more than tripled while world output has "only" doubled. The rise in trade relative to output is common across countries and regions, although the relative growth in trade and output varies greatly. This article attempts to explain why the ratio of world trade to output has increased over recent decades. It provides a brief review of the key determinants of trade growth and identifies proxies that will enable us to quantify the relative importance of the different channels. We estimate this across a panel of ten developed countries. This will allow us to understand better the path of world trade and thus the demand for UK exports. Furthermore this approach will help us to distinguish between long-run trends in trade growth and cyclical movements around it.

Suggested Citation

Barriel, Maria and Dean, Mark R. W., Why Has World Trade Grown Faster than World Output?. Bank of England Quarterly Bulletin, Autumn 2004. Available at SSRN: https://ssrn.com/abstract=700072

Maria Barriel (Contact Author)

Bank of England - Monetary Analysis ( email )

Threadneedle Street
London EC2R 8AH
United Kingdom

Mark R. W. Dean

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

HOME PAGE: http://www.econ.brown.edu/fac/Mark_Dean/

New York University (NYU) - Department of Economics ( email )

269 Mercer Street, 7th Floor
New York, NY 10011
United States

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