RESEARCH AND ANALYSIS: WORKING PAPERS

Measuring global trade policy activity

This paper introduces the Trade Policy Activity (TPA) Index, a novel indicator measuring evolving global trade policy dynamics since the Global Financial Crisis. Using a Dynamic Factor Model on comprehensive trade policy data covering 197 countries and territories, we document a structural shift around 2019 with a substantial expansion in the use of trade policies.

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The TPA Index also identifies cyclical episodes of heightened activity and reveals interconnections between different types of measures. We are also able to identify systematic differences in trade policy deployment among groups of economies. Additionally, we employ MIDAS (Mixed Data Sampling) regressions with high-frequency data to develop nowcasting capabilities for trade policy activity, enabling real-time identification of potential policy shifts. These results contribute to the trade policy measurement literature and offer a tool for monitoring global trade policy developments in real time.

Staff Working Paper: Research ERSD-2025-07

Author: Samuele Centorrino, Antonia Diakantoni, Alexander Keck, Michele Ruta, Monika Sztajerowska, Yuting Wei

Manuscript date: October 2025

Keywords:Trade policy, Dynamic factor models, Nowcasting

JEL classification numbers: F13, C32, C38, C53

 

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Disclaimer 

This is a working paper, and hence it represents research in progress. The opinions expressed in this paper are those of the authors. They do not represent the positions or opinions of the WTO or its Members and are without prejudice to Members' rights and obligations under the WTO. Any errors are attributable to the authors.

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