The great collapse in value added trade

Robert Stehrer and Arne Nagengast

No 1833, Working Paper Series from European Central Bank

Abstract: This paper studies the great collapse in value added trade using a structural decomposition analysis. We show that changes in vertical specialisation accounted for almost half of the great trade collapse, while the previous literature on gross trade has mainly focused on final expenditure, inventory adjustment and adverse credit supply conditions. The decline in international production sharing during the crisis may partially account for the observed decrease in global trade elasticities in recent years. Second, we find that the drop in the overall level of demand accounted for roughly a quarter of the decline in value added exports while just under one third was due to compositional changes in final demand. Finally, we demonstrate that the dichotomy between services and manufacturing sectors observed in gross exports during the great trade collapse is not apparent in value added trade data. JEL Classification: F1, F2, C67, R15

Keywords: Great trade collapse; input-output tables; Structural decomposition analysis; Trade in value added; Vertical specialization (search for similar items in EconPapers)
Date: 2015-07
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: The Great Collapse in Value Added Trade (2016)
Working Paper: The Great Collapse in Value Added Trade (2015)
Working Paper: The great collapse in value added trade (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20151833

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