Global Value Chains and Changing Trade Elasticities

Byron Gangnes (gangnes@hawaii.edu) and Ari Van Assche (ari.van-assche@hec.ca)
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Ari Van Assche: Department of International Business, HEC Montréal

No 2016-11, Working Papers from University of Hawaii Economic Research Organization, University of Hawaii at Manoa

Abstract: The trade collapse of 2008-2009 and the anemic trade growth since then raise the question of whether trade elasticities may be undergoing fundamental structural change. A potential source of such change is the spread of global value chains (GVCs), which have brought a marked increase in the use of intermediate goods and changes in the nature of trade competition. We review the recent literature on the impact of GVCs on measured trade elasticities and the ways in which their emergence may affect how we estimate and interpret trade responsiveness. We then draw out a few implications of recent research for global modeling.

Keywords: Global value chains; trade elasticities (search for similar items in EconPapers)
JEL-codes: C5 F14 F23 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2016-09
New Economics Papers: this item is included in nep-int
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Working Paper: Global Value Chains and Changing Trade Elasticities (2016)
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