Question

Describe the pattern over the last century shown by the trade-to GDP ratio for leading industrial economies.

Answer 1

In the last century world trade has more than tripled & output is only doubled. There is a significant rise in trade relative to output, though relative growth in output & trade varies across regions. The trade to GDP ratio fell between 1913 and 1950 but have risen relatively rapidly since smaller countries tend to be more open than the larger countries. The trade to GDP ratio has increased between1980 to 2002. By 2000 ratios were higher than they were before World War I. The trade to GDP ratio has increased in all major industrial economies in the last century. It has increased by around 15 percentage point in Euro area, Latin American countries & the united Kingdome. Between 2007 & 2010 the ratio fell due to the effects of financial crisis and subsequent recession.