Trade and the Global Recession

Jonathan Eaton, Samuel Kortum, Brent Neiman and John Romalis

No 16666, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop a dynamic multi-country general equilibrium model to investigate forces acting on the global economy during the Great Recession and ensuing recovery. Our multi-sector framework accounts completely for countries' trade, investment, production, and GDPs in terms of different sets of shocks. Applying the model to 21 countries, we investigate the 29 percent drop in world trade in manufactures during 2008-2009. A shift in final spending away from tradable sectors, largely caused by declines in durables investment efficiency, account for most of the collapse in trade relative to GDP. Shocks to trade frictions, productivity, and demand play minor roles.

JEL-codes: E3 F1 F4 (search for similar items in EconPapers)
Date: 2011-01
New Economics Papers: this item is included in nep-cmp, nep-int, nep-mac and nep-opm
Note: EFG IFM ITI PR
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Citations: View citations in EconPapers (183)

Published as Jonathan Eaton & Samuel Kortum & Brent Neiman & John Romalis, 2016. "Trade and the Global Recession," American Economic Review, American Economic Association, vol. 106(11), pages 3401-3438, November.

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Related works:
Journal Article: Trade and the Global Recession (2016)
Working Paper: Trade and the Global Recession (2013)
Working Paper: Trade and the Global Recession (2010)
Working Paper: Trade and the global recession (2010)
Working Paper: Trade and the Global Recession (2010)
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