The Great Trade Collapse, a consequence of the
2008 financial crisis
The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...
, occurred between the third quarter of 2008 and the second quarter of 2009. During this time, world GDP dropped by 1% and world trade dropped by 10%. This drop in global trade was synchronized
The Great Synchronisation: tracking the trade collapse with high-frequency data by Joaquim Oliveira Martins and Sónia Araújo in 2009
/ref> across almost every country in the world. Researchers cite three main reasons for the collapse: sudden drops in demand and supply, credit constraint, and a stifled global value chain
A global value chain (GVC) refers to the full range of activities that economic actors engage in to bring a product to market. The global value chain does not only involve production processes, but preproduction (such as design) and postproduction ...
.
See also
*Financial crisis
A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with Bank run#Systemic banki ...
References
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Financial crises