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In Argentina, we may have seen something of the same path dependence driven by trade shocks, only in reverse: the shock of global trade contraction discrediting and weakening the old outward-looking order, and allowing new interests to arise with more autarkic goals.
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Trade Exports contraction that began in late 2008 will gain pace in 2009 as more and more emerging economies slip into slowdown following the G-7 countries.
In fact, this might cause the trade deficit to contract in 1H 2009 since the contraction in imports might well exceed the decline in exports, thus containing any negative contribution of trade to GDP growth.
But would happily trade it for a contraction.
That drop would be deeper than the last major contraction in trade: 1.9 percent in 1975.
There's evidence aplenty that we are less joiners than before – witness the contraction of trade union membership.
A sharp contraction of trade in the Byzantine Empire was exacerbated by wild overspending by Venice, the medieval equivalent of a European central bank.
It could be that, anticipating a sudden slowdown in growth, firms draw down accumulated inventories sharply, causing a rapid contraction of trade.
Agri-food trade experienced a severe contraction, in both volume and especially in value, due to the fall in its relative prices (Ocampo and Parra-Lancourt 2010).
The EU report blamed the sluggishness on a sharp contraction in trade, partly a result of the dollar's weakness against the euro, which has made U.S. exports cheaper than European competitors.
Spats over whose currency leads, whose bonds are most desirable to be held in reserve and the recession's contraction in trade miss the point, looking unduly backward when sights should be attuned to the budding expansion.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com