Institute of Development Studies

The Impact of the Crisis on World Prices and Trade

Changes in international trade flows and world prices are major channels through which the global financial crisis hits developing countries. How these trade shocks and terms-of-trade trends affect economic performance and welfare in low-income countries depends on country-specific characteristics, especially initial trade patterns.

The project uses a global trade model to gauge the impact of a slowdown in economic activity in the OECD on trade performance, world prices, and aggregate welfare in the rest of the world – with a particular focus on the least developed countries in sub-Saharan Africa and Asia. The analysis also indicates the amount of external assistance that would be required to compensate adversely affected countries for the trade-related crisis impacts.

• IDS key contact: Dirk Willenbockel
• Project dates: December 2008 - March 2009
• Project status: Closed
• Funder: Department for International Development (DFID)

Researchers

• Dirk Willenbockel
• Sherman Robinson
• Neil McCulloch

Selected Outputs

• Willenbockel, D. and Robinson, S. (2009) 'Assessing the Impact of the Global Financial Crisis on World Prices and Trade in Developing Countries: Analysis with a World Trade Model' , Brighton: IDS
• Robinson, S. and Willenbockel, D. (2009) 'The Impact on Developing Countries of an OECD Recession', IDS In Focus Policy Briefing 7.7, Brighton: IDS