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.

Project details

start date
1 December 2008
end date
31 March 2009


Recent work


The Impact on Developing Countries of an OECD Recession


The global financial crisis and evolving recession in the developed countries and emerging economies will affect developing countries through two major channels: changes in international trade flows and world prices; and movements in global capital flows and foreign investment away from...

2 March 2009