Kishore Gawande, Bernard Hoekman, Yue Cui, Thursday, November 10, 2011

The Great Trade Collapse of 2008–09 did not give rise to rampant protectionism. This column examines the determinants of the observed pattern of trade-policy responses to the 2008 crisis, using data for seven large emerging markets that have a history of active use of trade policy. Vertical specialisation is found to be the most powerful economic factor determining trade-policy responses.