International trade and the crisis in the Eurozone

The financial crisis originated from the U.S. mortgage market and had a global impact. On August 2007, the crisis began with the banks and financial institutions losing capacity as a consequence to the downfall of the interbank market. Due to the crisis, the Eurozone’s economy experienced a downfall in export in September 2008. The purpose of this research is to examine antecedents of the development in exports of 333 product groups of the Euro 17 intra trade during the period of 2008 up to the end of 2009. In particular, the focus is on explaining the development in exports of two product sorts: intermediate and final goods. This research concludes that final goods import and foreign demand were conclusively the strongest factors that influenced the development in exports in the Eurozone during the crisis between 2008 up to the end of 2009. During the crisis, it was the import of final goods, and not intermediate goods import that had a positive significant impact on total export, final goods export and intermediate goods export, which shows that the Eurozone is probably mainly active in transit trade of final goods. Because the Eurozone looks to be mainly active in transit trade of final goods during the crisis, foreign demand is essential for determining the volume of export.