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Trade Collapses and Trade Slowdowns: Evidence from Some Central and Eastern European Countries

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  • Marco Giansoldati

    (University of Trieste, Italy)

  • Tullio Gregori

    (University of Trieste, Italy)

Abstract

World trade suddenly plummeted in the last quarter of 2008 after the bankruptcy of Lehman brothers and the subsequent meltdown in financial markets. Even if the following recovery was impressive, trade growth is now noticeably below trend. The anaemic momentum in global export volume questions whether the financial crisis has permanently changed the trade landscape. In this paper, we address trade elasticities in some Central and Eastern European economies by estimating a standard import function equation. We employ a dynamic panel Auto Regressive Distributed Lag model with the Common Correlated Effects Mean Group estimator to cope with cross-sectional dependence. The model is fit on a sample of eight countries over the period 1995:q1–2017:q1. First, we estimate long-run import elasticities with respect to GDP and the relative import price. Then, we discriminate between booms and slowdowns. Results confirm imports respond differently over the business cycle.

Suggested Citation

  • Marco Giansoldati & Tullio Gregori, 2018. "Trade Collapses and Trade Slowdowns: Evidence from Some Central and Eastern European Countries," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 16(1 (Spring), pages 3-18.
    • Handle: RePEc:mgt:youmgt:v:16:y:2018:i:1:p:3-18
    DOI: 10.26493/1854-6935.16.3-18
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    References listed on IDEAS

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    6. Patrice Ollivaud & Cyrille Schwellnus, 2015. "Does the post-crisis weakness of global trade solely reflect weak demand?," OECD Journal: Economic Studies, OECD Publishing, vol. 2015(1), pages 269-267.
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    Cited by:

    1. Pasi Rönkkö & Jukka Majava & Aleksi Isopoussu & Osmo Kauppila, 2021. "An Ability to Survive Disruptions: Findings from Three Finnish Manufacturing Companies’ Supply Challenges during the covid-19 Pandemic," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 19(2 (Summer), pages 105-126.

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    More about this item

    Keywords

    : World trade collapse; trade elasticities; CEECS; CCEMG;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • G01 - Financial Economics - - General - - - Financial Crises

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