MAGYAR NEMZETI BANK
5.4 Summary
This special topic deals with the slowdown of world trade dynamics compared to the historical average, which may also influence the national economic performance through the openness of Hungary. Based on the literature, the fall in world trade growth and the change in its income elasticity may be linked to both cyclical and structural factors. Although the temporary fall in demand linked to the global economic crisis may have had a negative impact on trade in the recovery period. Looking ahead, after the phasing out of cyclical effects, world
trade dynamics may continue to fall short of the precrisis average. This may be attributable to structural factors such as the past decades’ major geopolitical events, the expansion of global value chains reaching a limit, the change in relative importance of importintensive GDP components and the protectionist trade policy. Hungary may mitigate the downside risks arising from the potential deceleration of world trade primarily through the increase in export market share and the rise in domestic value added content of exports.
referenCeS ECB (2015): Understanding the weakness in world trade, Economic Bulletin, Issue 3, pp. 33-42, European Central Bank.
Abiad, A. – Mishra, P. – Topalova, P. (2014): How Does Trade Evolve in the Aftermath of Financial Crises?, IMF Economic Review, 62, pp. 213-247.
Constantinescu, C. – Mattoo, A. – Ruta, M. (2015): The Global Trade Slowdown: Cyclical or Structural?, IMF Working Papers 15/6, International Monetary Fund.
Freund, C. (2009): The Trade Response to Global Downturns: Historical Evidence, Policy Research Working Paper Series 5015, World Bank, Washington, DC.
Hoekman, B. (ed.) (2015): The Global Trade Slowdown: A New Normal?, VoxEU.org eBook, CEPR Press.
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Dadush, U. (2015): Should We Worry About the Great Trade Slowdown?, Policy notes & Policy briefs 1520, OCP Policy Center.
