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The Sectoral Trade Losses from Financial Crises
Author:
Jean-Marc B. Atsebi
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Jean-Louis Combesnull

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Alexandru Mineanull

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Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 176
Language:
English
Publication Date:
25 Jun 2021
DOI:
https://doi.org/10.5089/9781513586731.001
ISBN:
9781513586731
ISSN:
1018-5941
Pages:
87
Keywords:
trade loss; trade effect; trade activity; losses from financial crises; mining trade; Currency crises; Banking crises; Exports; Imports; Caribbean; Global
Legal-disclaimer:
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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The “Great Trade Collapse” triggered by the 2008-09 crisis calls for a careful assessment of the trade losses from financial crises. We adopt a more detailed perspective by looking at the response of different types of trade (i.e. agricultural, mining, and manufactured goods, and services) following various types of financial crises (i.e. debt, banking, and currency crises). Estimations performed on the 1980-2018 period using a combination of impact assessment and local projections to capture a causal dynamic effect running from financial crises to the trade activity show that the collapse of total trade is long-lasting and mainly driven by the fall of manufacturing and to some extent services trade. These causal effects are found to operate through three channels: a structural, a demand-side, and a supply-side channel. By contributing to the understanding of the trade effects of financial crises, our analysis provides insightful support for the design and implementation of policies aimed at coping with these effects.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2021: Issue 176