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WTO Working Papers

WTO working papers usually represent research in progress. Such research may be conducted in the preparation of WTO Secretariat reports, studies or other material for WTO members. The papers are circulated for comment because the WTO considers critical review of professional research to be extremely important.

English

The Falling Elasticity of Global Trade to Economic Activity

Testing the Demand Channel

Since the recovery from the great financial crisis in 2010, global real trade flows grew much slower than pre-crisis, in both absolute terms (growth rates) and relative terms (relative to GDP, from 2:1 in the great 1990's to 1:1 since 2012) A debate has arisen as to whether this global trade slowdown, and related falling trade-to-income elasticity, was structural or cyclical.

English

Keywords: global outlook, trade forecasting, trade policy, investment, business cycles
JEL: E22: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Investment; Capital; Intangible Capital; Capacity; F17: International Economics / Trade / Trade: Forecasting and Simulation; F13: International Economics / Trade / Trade Policy; International Trade Organizations; F01: International Economics / General / Global Outlook; F44: International Economics / Macroeconomic Aspects of International Trade and Finance / International Business Cycles
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