The Great Collapse in Value Added Trade

30 Pages Posted: 5 Apr 2016

See all articles by Arne Nagengast

Arne Nagengast

Deutsche Bundesbank - Economics Department

Robert Stehrer

Vienna Institute of International Economic Studies (WIIW)

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Date Written: May 2016

Abstract

This paper studies the great collapse in value added trade using a structural decomposition analysis. We show that changes in vertical specialization accounted for more than 40% of the great trade collapse. Second, we find that the drop in the overall level of demand accounted for roughly a quarter of the decline in value added exports while just under one third was due to compositional changes in final demand. Finally, we demonstrate that the dichotomy between services and manufacturing sectors observed in gross exports during the great trade collapse is not apparent in value added trade data.

Suggested Citation

Nagengast, Arne and Stehrer, Robert, The Great Collapse in Value Added Trade (May 2016). Review of International Economics, Vol. 24, Issue 2, pp. 392-421, 2016, Available at SSRN: https://ssrn.com/abstract=2759087 or http://dx.doi.org/10.1111/roie.12218

Arne Nagengast (Contact Author)

Deutsche Bundesbank - Economics Department ( email )

Wilhelm-Epstein-Strasse 14
60431 Frankfurt am Main
Germany

Robert Stehrer

Vienna Institute of International Economic Studies (WIIW) ( email )

A-1010 Vienna
Austria

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