Despite green shoots in the OECD and strong growth rates in China and India the world economy is not out of the woods yet. In 2007 the most serious global economic crisis since the 1930s started and many developing and emerging economies (DEEs), that since the mid 1990s had opened up to the world economy, are now experiencing the down side of strategies that - for good reasons - relied heavily on international trade and foreign direct investment to achieve national development. What was expected When the financial crisis burst out in 2007 the majority of economists was not expecting the DEEs to be hit hard. A first, often-mentioned, reason was that developing countries had not engaged in the kind of financial whiz-kidding that had created the enormous bubble in the OECD. Thus it was assumed by many analysts that the DEEs would not suffer a fall-out from the banking crisis which after all was a problem of the OECD countries. A second reason was the myth of decoupling: the non OECD, in ...

The world trade collapse that started in October 2008 and reduced global trade by some twenty per cent in only a few months time remains one of the most puzzling phenomena of the last decade. In mid-2009 a consensus amonst trade economists appeared to have emerged. The concensus can be summarized in two ways. Many economists argue that the trade collapse was a demand shock multiplied by a composition effect (the 2009 edited volume by Richard Baldwin is an example). The other view in the profession (of which the WTO in 2009 is an example) is that the trade collapse was caused by protectionism, lacking trade finance and the fragmentation of production in international value chains (the latter incidentally is seen to be a driver of composition effects). My problem with both representations of the consensus is that they are based on empirical analyses of post Second World War data only. Economists typically do not include the Black Swan of the 1930s in their analysis. This would seem to ...

Ref.: Ms. No. IEEP-D-10-00038 International Value Chains and The World Trade Collapse: A Cross-Country Perspective International Economics and Economic Policy Dear prof dr van bergeijk, Reviewer's comments on your work have now been received. You will see that it is advising against publication of your work. Therefore I must reject it. For your guidance, I append the reviewer's comments below. Thank you for giving us the opportunity to consider your work. Yours sincerely Thomas Domeratzki Editorial Assistant International Economics and Economic Policy Reviewer's comments: Reviewer: Summary The paper "International Value Chains and the World Trade Collapse: A Cross Country Perspective" examines the role of vertical value chains in the trade collapse of 2008/09. Using a cross-country estimation, the decrease in imports between 2008-2009 is regressed on the degree of vertical value chains (as measured by (i) manufacturing products in total im...

Your paper, "Let’s Assume the WTO is Wrong: 6 plus 1 Hypotheses for the World Trade Collapse", was recently listed on SSRN's Top Ten download list for International Trade eJournal. As of 09/30/2010, your paper has been downloaded 62 times. You may view the abstract and download statistics at http://papers.ssrn.com/abstract=1656537 . Top Ten Lists are updated on a daily basis. Click on the following link to view the Top Ten list for the journal International Trade eJournal Top Ten. Click on the following link to view all the papers in the journal International Trade eJournal All Papers . To view any of the Top Ten lists, click the TOP button on any network, subnetwork, journal or topic in the Browse list reachable through the following link:

Z Yamin, H Haoshen - TRADE CONTRACTION PATTERN AFTER CRISIS:  Trade and Finance Association Conference Papers, 2010 Even without concrete and observable trade conflicts, the implied uncertainty about trading possibilities will influence the extent of specialization and the pattern of specialization as well (p. 5)

Message do 2 sep 2010 8:48 From: "Richard Baldwin" To: Peter van Bergeijk Subject: Your paper on trade collapse. Attachments: Attach0.html 8K Hi, Your paper asserts: "the main stream narrative that links the strength and speed of the world trade collapse in 2008-9 to (i) lacking trade finance, (ii) international value chains and (iii) ‘murky’ protectionism." I think you’ve got that wrong. See http://www.voxeu.org/index.php?q=node/4297 for what is the mainstream explanation. It was a demand shock multiplied by a composition effect. Richard Baldwin

At the end of his inaugural address, Charles van Marrewijk at Utrecht University pointed out that a better titel would have been COLLAPSING TRADE FLOWS: THE SUPPLY CHAIN MYTH. Indeed. Van Marrewijk uncovers similar patterns as On the brink of globalization where his study is extensively quoted. Van Marrewijk uses the Grubel-Loydd index for intra-industry trade and studies both exports and imports Van Marrewijk analyzes the depth, the duration and the inclination (steepness) of the trade cycle from peak to trough. In addition he uses four different ways to define peak and trough, namely the original raw data, a 5-month centered average, and deviations from trend based on either of these two series. In no case does Van Marrewijk find the hypothesized positive correlation between on the one hand, the share of intra-industry trade and on the other hand, the depth, duration and inclination of export and/or import trade declines. The inaugural address was published in Dutch in the ooggetu...