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    Current page location: Home > Answers > How do economic recessions affect international trade?
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    Betty Green
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    How do economic recessions affect international trade?

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    • Time:2018-10-19 15:00:38
    How do economic recessions affect international trade?
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    Siyu Song
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    Immediate impact - during a recession, investor confidence is low. Hence, there is a reduction in investment. Since developing economies form the bulk of investing destination today (55% according to a WTO report), they're the one that are most hit by a recession in terms of new investments. 

    Medium/Long term impact - During a recession, people lose jobs and reduce consumption. Consumption of firms also decrease due to lower economic activity in the economy. As a result, there is reduced demand on an aggregate level. This reduces trade of goods and commodities (at least the elastic goods). People are less likely go indulge in luxurious products and services like cars, tourism etc. During a recession.

    #1Floor 2018-10-19 17:30:28 Reply(0)
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