Does the Global Trade Slowdown Matter?
Since the Global Financial Crisis, world trade growth has been subdued and lagging slightly behind growth of gross domestic product. Trade is growing more slowly not only because growth of global gross domestic product is lower, but also because tr...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/05/26374682/global-trade-slowdown-matter http://hdl.handle.net/10986/24512 |
| Summary: | Since the Global Financial Crisis, world
trade growth has been subdued and lagging slightly behind
growth of gross domestic product. Trade is growing more
slowly not only because growth of global gross domestic
product is lower, but also because trade itself has become
less responsive to gross domestic product. This paper
reviews the reasons behind the changing trade-income
relationship, and then investigates its consequences for
economic growth. On the demand side, sluggish world import
growth may adversely affect individual countries'
economic growth, as it limits opportunities for their
exports. On the supply side, slower trade may diminish the
scope for productivity growth through increasing
specialization and diffusion of technologies. The paper
finds preliminary evidence that the changing trade-income
relationship matters, although the quantifiable effects do
not appear to be large. |
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