Trade Crisis? What Trade Crisis?

World trade fell dramatically during 2009, but there has been little econometric analysis of the different explanations put forward. Using data from Belgium, Gregory Corcos , together with Giordano Mion and Kristian Behrens, argue that a fall in demand was the main culprit. The trade fall was very evenly spread across industries, across firms within industries and across products and countries, and domestic sales and purchases fell equally fast with no systematic variation across firms. The authors conclud that trade was not in crisis per se and that it would be better to talk about a trade collapse rather than a trade crisis.

During his short visit at CESifo, Gregory Corcos will work on and present a paper on the spillovers between services and goods trade policy, starting from the observation that goods trade increases when services trade barriers fall and vice versa, even in highly disaggregated trade data. He will offer a model of input sourcing that rationalises that phenomenon, matches several key features of imports data and quantifies the response of one type of trade to liberalisation of the type. The study will contribute to the recent literature that quantifies the gains from further liberalisation of services trade.

Gregory Corcos is an Assistant Professor at the Department of Economics of the Norwegian School of Economics and Business Administration (NHH) as well as a research Fellow at the EXCESS research centre in Paris and a CESifo Research Network Affiliate. He holds a PhD and a masters degree in Economics from the Paris School of Economics as well as a masters degree in Management from HEC Paris. His research interests include international trade and productivity, foreign direct investment and taxation as well as trade and organisational decisions.