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Consumption and service sector demand played a key role in the COVID-19 global trade collapse

November 24, 2021

Consumption and service sector demand played a key role in the COVID-19 global trade collapse
The global economy and global trade flows have been hit hard by the COVID-19 crisis (Baldwin 2020, Liu et al. 2021). The trade collapse of in the 2nd quarter of 2020 was even more severe than during the trough of the Global Crisis in 2009. However, considering the substantial fall in the GDP of most countries during the COVID-19 crisis, the relative trade contraction seems mild compared with the Global Crisis. During the Global Crisis, the combined volume of the GDP of OECD countries contracted by about 5%, and the combined volume of imports of goods and services by 17% from peak to trough (Figure 1). The corresponding figures for the COVID-19 crisis were -12% and -20%,

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