Fragmentation in Global Trade: Accounting for Commodities

Marijn Bolhuis, Jiaqian Chen and Benjamin Kett

No 2023/073, IMF Working Papers from International Monetary Fund

Abstract: We construct a new database which covers production and trade in 136 primary commodities and 24 manufacturing and service sectors for 145 countries. Using this new more granular data, we estimate spillover effects from plausible trade fragmentation scenarios in a new multi-country, multi-sector, general-equilibrium model that accounts for unique demand and supply characteristics of commodities. The results show fragmentation-induced output losses can be sizable, especially for Low-Income-Countries, although the magnitudes vary according to the particular scenarios and modelling assumptions. Our work demonstrates that not accounting for granular commodity production and trade linkages leads to underestimation of the output losses associated with trade fragmentation.

Keywords: Commodities; international trade; sanctions; spillovers; fragmentation; trade elasticity; output loss; commodity production; trade fragmentation; trade linkages lead; Trade barriers; Commodity trade; Trade balance; Agricultural commodities; Global (search for similar items in EconPapers)
Pages: 35
Date: 2023-03-24
New Economics Papers: this item is included in nep-int
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