Vertical Linkages and the Collapse of Global Trade

@article{Bems2011VerticalLA,
  title={Vertical Linkages and the Collapse of Global Trade},
  author={Rudolfs Bems and Robert C. Johnson and Kei-Mu Yi},
  journal={The American Economic Review},
  year={2011},
  volume={101},
  pages={308-312}
}
A common view is that cross-border vertical linkages played a key role in the 2008-2009 collapse of global trade. This paper presents two accounting results from a global input-output framework that shed light on this channel. We feed in observed changes in final demand and find that trade in final goods fell by twice as much as trade in intermediate goods. Nevertheless, intermediate goods account for more than two-fifths of the trade collapse. We also find that vertical specialization trade… Expand

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