Sluggish Exports in Advanced Economies: How Much Is Due to Demand?

Louis Morel

Discussion Papers from Bank of Canada

Abstract: Exports in advanced economies have been relatively sluggish since 2011, growing at a much slower pace than observed before the global financial crisis. In this paper, export-demand equations for a panel of 18 countries in the Organisation for Economic Co-operation and Development (OECD) are estimated in order to assess whether this sluggishness can be attributed to weak foreign demand. Over half of the slowdown in advanced-economy export growth since 2011 (relative to the pre-crisis trend) can be explained by weak global demand growth. More specifically, exports in advanced economies have been restrained by the weakness of global investment, a trade-intensive demand component and weak demand out of Europe, a region that accounts for about 40 per cent of the demand for advanced-economy exports. Weak foreign demand cannot explain all of the weakness in aggregate OECD exports since 2011, suggesting that other factors have also played a role.

Keywords: International topics; Recent economic and financial developments (search for similar items in EconPapers)
JEL-codes: F1 F4 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2015
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocadp:15-3

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