TY  - JOUR
AU  - Bems,Rudolfs
AU  - Johnson,Robert C.
AU  - Yi,Kei-Mu
TI  - The Great Trade Collapse
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18632
PY  - 2012
Y2  - December 2012
UR  - http://www.nber.org/papers/w18632
L1  - http://www.nber.org/papers/w18632.pdf
N1  - Author contact info:
Rudolfs Bems
Research Department
International Monetary Fund
Washington, DC
E-Mail: rbems@imf.org

Robert C. Johnson
Department of Economics
Dartmouth College
6106 Rockefeller Hall
Hanover, NH 03755
Tel: 603/646-0643
Fax: 603/646-2122
E-Mail: robert.c.johnson@dartmouth.edu

Kei-Mu Yi
Federal Reserve Bank of Minneapolis
90 Hennepin Avenue
Minneapolis, MN 55401
E-Mail: kei-mu.yi@mpls.frb.org
AB  - We survey recent literature on the causes of the collapse in international trade during the 2008-2009 global recession.  We argue that the evidence points to the collapse in aggregate expenditure, concentrated on trade-intensive durable goods, as the main driver of the trade collapse.  Inventory adjustment likely amplified the impact of these expenditure changes on trade.  In addition, shocks to credit supply constrained export supply further exacerbating the decline in trade.  Most evidence suggests that changes in trade policy did not play a large role.  We conclude that one benefit of the trade collapse is that it has stimulated research in neglected areas at the intersection of trade and macroeconomics.
ER  -