Measuring global trade policy activity

Samuele Centorrino, Antonia Diakantoni, Alexander Keck, Michele Ruta, Monika Sztajerowska and Yuting Wei

No ERSD-2025-07, WTO Staff Working Papers from World Trade Organization (WTO), Economic Research and Statistics Division

Abstract: This paper introduces the Trade Policy Activity (TPA) Index, a novel indicator measuring evolving global trade policy dynamics since the Global Financial Crisis. Using a Dynamic Factor Model on comprehensive trade policy data covering 197 countries and territories, we document a structural shift around 2019 with a substantial expansion in the use of trade policies. The TPA Index also identifies cyclical episodes of heightened activity and reveals interconnections between different types of measures. We are also able to identify systematic differences in trade policy deployment among groups of economies. Additionally, we employ MIDAS (Mixed Data Sampling) regressions with high-frequency data to develop nowcasting capabilities for trade policy activity, enabling realtime identification of potential policy shifts. These results contribute to the trade policy measurement literature and offer a tool for monitoring global trade policy developments in real time.

Keywords: Trade policy; Dynamic factor models; Nowcasting (search for similar items in EconPapers)
JEL-codes: C32 C38 C53 F13 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-int and nep-inv
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Working Paper: Measuring Global Trade Policy Activity (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wtowps:330318

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