Demand Spillovers and the Collapse of Trade in the Global Recession

Bems, Rudolfs; Johnson, Robert C.; Yi, Kei-Mu

doi:10.1057/imfer.2010.15

Cited by 237 publications

(219 citation statements)

References 23 publications

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“…Interestingly, this negative effect is found to be significant even controlling for changes in income and 10 The positive or insignificant coefficients on the contemporaneous crisis variables might be due to the fact that we are not capturing the precise time of the year at which the crisis happen. If crises tend to occur on average toward the end of the calendar year, this coefficient may be capturing increases in trade, for instance to due pre-crisis credit booms.…”

Section: Average Effect Of Banking Crises On Tradementioning

confidence: 85%

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The Vulnerability of Sub-Saharan Africa to Financial Crises: The Case of Trade

Berman¹,

Martin²

2012

IMF Econ Rev

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Motivated by the 2008-2009 financial crisis and the trade collapse, we analyze the effect of past banking crises on trade with a focus on African exporters. We show that they are particularly vulnerable to a banking crisis in the countries they export to. We distinguish between an income effect (during a banking crisis, income and exports to the country fall) and a disruption effect (a banking crisis disrupts the financing of trade channels). For the average country, the disruption effect is moderate (a deviation from the gravity predicted trade of between 1 to 5%). We find however that the disruption effect is much larger and long-lasting for African exporters as the fall in trade (relative to gravity) is 10 to 15 percentage points higher than for other countries in the aftermath of a banking crisis. This vulnerability of African exports in the short-run does not come from a composition effect, i.e. from the fact that primary exports are disrupted more severely than manufacturing exports. Instead, we provide suggestive evidence that the dependence of African countries upon trade finance is an important determinant of their vulnerability to banking crises in partner countries.

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Section: Average Effect Of Banking Crises On Tradementioning

confidence: 85%

“…10 The average yearly deviation in imports in the three years after the start of the crisis is between -2% and -3% 11 when controlling for GDPs and prices (columns (1) and (5)). …”

Section: Average Effect Of Banking Crises On Tradementioning

confidence: 99%

The Vulnerability of Sub-Saharan Africa to Financial Crises: The Case of Trade

Berman¹,

Martin²

2012

IMF Econ Rev

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“…In addition, growth shocks originating in other economies, especially in other advanced economies, have a significant impact on activity in the United States (Bems, Johnson, and Yi 2010).…”

Section: Spillovers From the World To The United Statesmentioning

confidence: 99%

The Global Role of the U.S. Economy: Linkages, Policies and Spillovers

Kose¹,

Lakatos²,

Ohnsorge³

et al. 2017

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“…international trade in intermediate goods, play a key role in trade linkage. Recently, using input -output analysis, Levchenko et al (2010) and Bems et al (2010) reveal that sectors using intermediate inputs experienced significantly greater reductions in both imports and exports during the recent crisis. In Asian economies, as explained by Pula and Pel tonen (2009) using input-output analysis, international production networks and vertical linkages with advanced economies were more developed than in any other region.…”

Section: Introductionmentioning

confidence: 99%

Transmission of US financial and trade shocks to Asian economies: Implications for spillover of the 2007–2009 US financial crisis

Yamamoto¹

2014

The North American Journal of Economics and Finance

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This paper describes an investigation of the transmission of US shocks to Asian economies with consideration of financial linkages and trade linkages. Using the sign restriction vector autoregression (VAR) approach during 2000-2012, our empirical results can be summarized as follows. First, both US financial and trade linkages exert a significant impact on production in Asian economies. Second, through both financial and trade linkages, US spillover shocks account for around 50% of the production fluctuation in Asian economies. Third, during the episodes of 2007-2009 US financial crisis, the impact of financial shocks is greater than that of trade shocks. Results suggest that (i) Asian economies are not decoupled with US; (ii) Different from conventional findings, financial linkages between US and Asian economies are strong, especially for highly developed Asian economies. Therefore, investors and policymakers of Asian economies should take account of US financial conditions. 2

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Demand Spillovers and the Collapse of Trade in the Global Recession

Abstract: trade, and production across countries. We find that 20-30% of the decline in U.S. and EU final demand was borne by foreign countries, with NAFTA

Cited by 237 publications

References 23 publications

The Vulnerability of Sub-Saharan Africa to Financial Crises: The Case of Trade

The Vulnerability of Sub-Saharan Africa to Financial Crises: The Case of Trade

The Global Role of the U.S. Economy: Linkages, Policies and Spillovers

Transmission of US financial and trade shocks to Asian economies: Implications for spillover of the 2007–2009 US financial crisis

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