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Unpacking services trade during the Great Trade Collapse: time series evidence for the US

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  • Janet Ceglowski

    (Bryn Mawr College)

Abstract

This study investigates the apparent resilience of services trade during the 2008–2009 global recession by analyzing the time-series behavior of aggregate US services exports and imports over 1987–2014. It finds evidence of structural instability in the long-run trade equations but little evidence it is coincident with the global recession. It also uncovers a distinct pattern in the income elasticity of business services trade: a large long-run value but a significantly smaller short-run value. Combined with its large weight in total US services trade, the limited short-run demand response of business services trade dampened the effect of the economic downturn on aggregate services trade. Far from being an anomaly, the response of US services trade to the 2008–2009 global recession was consistent with its time-series and compositional characteristics.

Suggested Citation

  • Janet Ceglowski, 2017. "Unpacking services trade during the Great Trade Collapse: time series evidence for the US," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(3), pages 457-486, August.
    • Handle: RePEc:spr:weltar:v:153:y:2017:i:3:d:10.1007_s10290-016-0274-9
    DOI: 10.1007/s10290-016-0274-9
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    References listed on IDEAS

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    Cited by:

    1. Ando, Mitsuyo & Hayakawa, Kazunobu, 2022. "Impact of COVID-19 on trade in services," Japan and the World Economy, Elsevier, vol. 62(C).

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    More about this item

    Keywords

    Services trade; Income elasticity; Great Trade Collapse;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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