Network Effects of International Shocks and Spillovers

Author/Editor:

Alexei P Kireyev ; Andrei Leonidov

Publication Date:

July 7, 2015

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper proposes a method for assessing international spillovers from nominal demand shocks. It quantifies the impact of a shock in one country on all other countries. The paper concludes that the network effects in shock spillovers can be substantial, comparable, and often exceed the initial shock. Individual countries may amplify, absorb, or block spillovers. Most developed countries pass-through shocks, whereas low-income countries and oil exporters tend to block shock spillovers. The method is used to study demand shocks originating from a large and medium country, China and Ukraine respectively.

Series:

Working Paper No. 2015/149

Subject:

Export earnings Exports Financial sector policy and analysis Imports International trade Spillovers Trade balance

English

Publication Date:

July 7, 2015

ISBN/ISSN:

9781513542928/1018-5941

Stock No:

WPIEA2015149

Pages:

43

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