How will global trade patterns evolve in the long run?

Eddy Bekkers; Erwin Corong; Jeanne Métivier; Daniil Orlov

doi:10.1111/twec.13575

journal article Jun 01, 2024

How will global trade patterns evolve in the long run?

Eddy Bekkers

Erwin Corong Jeanne Métivier Daniil Orlov

The World Economy Vol. 47 No. 8 pp. 3578-3617 · Wiley

View at Publisher Save 10.1111/twec.13575

Abstract

AbstractIn this paper, the evolution of global trade patterns until 2050 is projected with a recursive dynamic computable general equilibrium (CGE) model. Feeding the model with exogenous projections on macroeconomic, demographic, sectoral and trade cost variables, the evolution of trade patterns emerges endogenously from the model. The approach is innovative in both modelling approach and exogenous inputs. GDP growth emerges endogenously in the model because of diffusion of ideas as a result of international trade and trade cost changes are based on estimates of technology and trade policy changes. The projections indicate that (i) because of projected reductions in trade costs, trade will grow more than GDP, generating a global trade‐to‐GDP growth rate of 1.1; (ii) because of structural change, the global share of manufacturing trade falls from 64% in 2020 to 52% by 2050, whereas the share of services trade rises substantially from 24% to 38%; and (iii) because of technological catch‐up, the share in global trade of both developing and least‐developed countries (LDCs) will rise (with developing countries overtaking developed economies around 2035), the share of intra‐developed country trade will fall, whereas the share of intra‐developing country trade and those between developing and developed countries will rise.

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References

Details

Published: Jun 01, 2024
Vol/Issue: 47(8)
Pages: 3578-3617
License: View

Authors

E

Eddy Bekkers

World Trade Organization Geneva Switzerland

E

Erwin Corong

Center for Global Trade Analysis (GTAP) Purdue University West Lafayette Indiana USA

J

Jeanne Métivier

World Trade Organization Kedge Business School Talence France

D

Daniil Orlov

World Trade Organization Geneva Switzerland

Cite This Article

Eddy Bekkers, Erwin Corong, Jeanne Métivier, et al. (2024). How will global trade patterns evolve in the long run?. The World Economy, 47(8), 3578-3617. https://doi.org/10.1111/twec.13575

How will global trade patterns evolve in the long run?

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