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The Potential Impact of the Global Financial Crisis On World Trade / McKibbin, Warwick J.
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- McKibbin, Warwick J.
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Banks and Banking Reform.
- Bonds.
- Debt Markets.
- Durable goods.
- Economic Theory and Research.
- Emerging Markets.
- Equilibrium.
- Exports.
- Finance and Financial Sector Development.
- Financial Crisis.
- Fiscal policy.
- GDP.
- Income.
- International Trade.
- Liquidity.
- Macroeconomic Analysis.
- Monetary policy.
- Net exports.
- Private Sector Development.
- Protectionism.
- Real exchange rates.
- Recession.
- Risk premium.
- Social Protections and Labor.
- Trade policy.
- Unemployment.
- Wealth.
- Local Subjects:
- Banks and Banking Reform.
- Bonds.
- Debt Markets.
- Durable goods.
- Economic Theory and Research.
- Emerging Markets.
- Equilibrium.
- Exports.
- Finance and Financial Sector Development.
- Financial Crisis.
- Fiscal policy.
- GDP.
- Income.
- International Trade.
- Liquidity.
- Macroeconomic Analysis.
- Monetary policy.
- Net exports.
- Private Sector Development.
- Protectionism.
- Real exchange rates.
- Recession.
- Risk premium.
- Social Protections and Labor.
- Trade policy.
- Unemployment.
- Wealth.
- Physical Description:
- 1 online resource (63 pages)
- Place of Publication:
- Washington, D.C., The World Bank, 2009
- System Details:
- data file
- Summary:
- This paper models the global financial crisis as a combination of shocks to global housing markets and sharp increases in risk premia of firms, households and international investors in a global economic model. The model has six sectors of production and trade in 15 major economies and regions. The paper shows that the shocks observed in financial markets can be used to generate the severe economic contraction in global trade and production experienced in 2009. In particular the distinction between the production and trade of durable and non durable goods plays a key role in explaining the much larger contraction in trade than GDP experienced by most economies. The paper explores the implications of the large increase in fiscal deficits and the implications of a global trade war in response to the financial crisis.
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