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6½ Decades of Global Trade and Income: “New Normal” or “Back to Normal” after GTC and GFC?
Author: Sanjay Kalra
Series:
IMF Working Papers
Volume/Issue:
Volume 2016: Issue 139
Language:
English
Publication Date:
12 Jul 2016
DOI:
https://doi.org/10.5089/9781475526592.001
ISBN:
9781475526592
ISSN:
1018-5941
Pages:
26
Keywords:
WP; least squares; Global Trade and Income; Elasticities; SVAR; Globalization; Technology shocks; Structural breaks; global export; export value; trade financing constraint; trade-income relationship; merchandise export; exports to income; trade slowdown; determinant resid covariance; Personal income; Exports; Structural vector autoregression; Export performance; Vector autoregression; Global; Eastern Europe
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Global merchandise trade expanded rapidly over the last 6½ decades and its relationship with global income has seen ebbs and flows. This paper examines the shifts in this relationship using time series data over 1950-2014 and situates it in the current and longer term context. The conjunctural context comes from, among other things, the “great trade collapse” (GTC) and the global financial crisis (GFC) in 2009, and developments since then. The longer term context comes from the relative role of “globalization” and “technology” shocks in accounting for the short and long run variance of global exports and income. The paper estimates trade and income elasticities using ADL models taking account of structural breaks, and impulse response functions from structural VARs. The estimated SVAR model provides a lens to ask whether global trade and income are in a “new normal’ or only “back to (an old) normal” after the GTC and GFC.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund