Assessing the Fragility of Global Trade: The Impact of Localized Supply Shocks Using Network Analysis

By Yevgeniya Korniyenko, Magali Pinat, Brian Dew

February 13, 2017

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Yevgeniya Korniyenko, Magali Pinat, and Brian Dew. Assessing the Fragility of Global Trade: The Impact of Localized Supply Shocks Using Network Analysis, (USA: International Monetary Fund, 2017) accessed September 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Anecdotal evidence suggests the existence of specific choke points in the global trade network revealed especially after natural disasters (e.g. hard drive components and Thailand flooding, Japanese auto components post-Fukushima, etc.). Using a highly disaggregated international trade database we assess the spillover effects of supply shocks from the import of specific goods. Our goal is to identify inherent vulnerabilities arising from the composition of a country’s import basket and to propose effective mitigation policies. First, using network analysis tools we develop a methodology for evaluating and ranking the supply fragility of individual traded goods. Next, we create a country-level measure to determine each country’s supply shock vulnerability based on the composition of their individual import baskets. This measure evaluates the potential negative supply shock spillovers from the import of each good.

Subject: Economic theory, Environment, Export performance, Exports, Imports, International trade, Natural disasters, Supply shocks

Keywords: Export performance, Exports, Global, Imports, International trade, Natural disasters, Network analysis, Network products, Offragile products, Product exporter, Product fragility, Product network, Product vulnerability, Products description, Risky product, Spillovers, Standard deviation, Supply shocks, WP

Publication Details

Pages:

38
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2017/030
Stock No:

WPIEA2017030
ISBN:

9781475578515
ISSN:

1018-5941

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