The fall in economic activity during the Great Recession was followed by a sudden and severe plunge in international trade flows around the globe. Between July 2008 and February 2009, the nominal value of world exports fell by 36%. Despite the pro-cyclical nature of trade, such a drop distills traits of exceptionality that our analysis underscores. The drop in international trade during the crisis was fundamentally due to a synchronized and generalized fall in global demand with a greater impact on sectors that weigh more in trade than in gross domestic product. On the other hand, although credit shortages seem to have played a minor role, we cannot rule out an adverse impact on trade during the crisis. Regarding future perspectives, we foresee a moderation in the recent pace of the recovery of trade flows and a change in trend with respect to the pre-crisis cycle.

Keywords: international trade, gravity equation, transaction costs
JEL Codes: F14, F53, F15, C23

All documents are in Adobe Acrobat format (PDF).
To view a document in PDF format you need the Adobe Acrobat Reader. If you don’t have it already loaded on your computer, you can donwload it now.