Trade response to global downturns

Caroline Freund "Trade response to global downturns" found following regularities during the last four economic slowdowns (1971, 1982, 1991, 2001):

• "trade contraction follows the GDP decline and ... trade volume declines by about 1 percent on average in first year of its contraction"
• "The decline in the growth rate of trade (from historical average to trough) is sudden and is on average more than 4 times as large as that of income."
• "deceleration in trade value tends to be far greater than in trade volumes"

What to expect form the current crisis?

"Given current GDP forecasts and trade data available through June, our results imply that the decline in real trade in 2009 could well exceed 15 percent. In addition, global imbalances are likely to be mitigated during the crisis, and this may persist even after the crisis is resolved. Finally, food and beverages are likely to be the least affected products in the coming months."