How Does Trade Evolve in the Aftermath of Financial Crises?

We analyze trade dynamics following past episodes of financial crises. Using an augmented gravity model and 179 crisis episodes from 1970-2009, we find that there is a sharp decline in a countryâ€™s imports in the year following a crisis-19 percent, on average-and this decline is persistent, with imports recovering to their gravity-predicted levels only after 10 years. In contrast, exports of the crisis country are not adversely affected, and they remain close to the predicted level in both the short and medium-term.

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Year of publication:	2011-01-01
Authors:	Abiad, Abdul ; Topalova, Petia ; Mishra, Prachi
Institutions:	International Monetary Fund (IMF)
Subject:	Trade \| Bilateral trade \| Economic models \| exporter \| trade flows \| financial crises \| trading partners \| international trade \| exporting countries \| tariff equivalent \| trade costs \| world trade \| bilateral trade flows \| antidumping measures \| export price \| export flows \| multilateral trade \| aggregate imports \| free trade \| trade liberalization \| aggregate exports \| log exporter \| trade agreement \| free trade agreement \| importing country \| bilateral imports \| export losses \| export performance \| increased protectionism \| trade data \| trade disruption \| export supply \| exchange rate depreciation \| import prices \| average tariffs \| exchange rate regimes \| exportable goods \| trade losses \| real exports \| aggregate demand \| global trade \| trade area \| exporting country \| trading partner \| import demand \| trade classification \| intermediate goods \| real effective exchange rate \| policy regimes \| domestic demand \| domestic aggregate demand \| global supply \| elasticity of substitution \| standard variables \| antidumping database \| trade growth \| supply chain \| domestic producers \| interest groups \| exporters \| neighboring countries \| trade openness \| equilibrium model \| economic downturns \| import tariffs \| partner countries \| financial ? crises \| world trade growth \| commodity prices \| average trade \| trade volumes \| intermediate products \| exporting firms \| free trade area \| preferential trade \| aggregate trade \| trade impact \| balance of payments \| trade patterns \| trade values \| bilateral trade data \| trade agreements \| domestic production \| volume of trade \| measure of trade \| free-trade area \| elasticity of trade \| preferential trade agreements \| trading arrangements

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Extent:	application/pdf
Series:	IMF Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	The text is part of a series IMF Working Papers Number 11/3 5 pages long
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008839351