{
  "title": "The Systemic Impact of Debt Default in a Multilayered Global Network Model",
  "publication": "IMF Working Papers, September 2, 2022",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2022/09/02/the-systemic-impact-of-debt-default-in-a-multilayered-global-network-model-522832",
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  "summary": "The world has become more interconnected over the past few decades. Against this backdrop, economic and financial contagion following adverse shocks can have a severe impact on the global economy. How systemic can the effects of contagion be? What specific transmission channels are involved?",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Title: The Systemic Impact of Debt Default in a Multilayered Global Network Model\n- Authors: Nathan Porter, Camilo E Tovar Mora, Juan P Trevino, Johannes Eugster, Theofanis Papamichalis\n- Date: September 2, 2022\n- Series: Working Paper No. 2022/171\n- Issue: 171\n- Volume: 2022\n- Pages: 25\n- DOI: https://doi.org/10.5089/9798400218712.001\n- ISBN: 9798400218712\n- ISSN: 1018-5941"
    },
    {
      "heading": "Research question and approach",
      "content": "- Core questions:\n  - How systemic can the effects of contagion be?\n  - What specific transmission channels are involved?\n  - What is their relative importance?\n- Methodology:\n  - A multilayered global network model of contagion that simulates the impact of sovereign debt default on the global economy.\n  - Development of a measure of global systemic risk.\n  - Use of bank stress testing techniques to quantify the systemic impact of the shock and the extent of contagion on the global economy."
    },
    {
      "heading": "Key findings",
      "content": "- Economic and financial contagion are highly non-linear.\n- Many bystander economies can experience significant negative effects as the initial default is spread through the network.\n- The results imply that many economies might be systemically more important than what conventional measures of size or openness might suggest."
    },
    {
      "heading": "Subjects and keywords",
      "content": "- Subjects: Balance of payments, Central banks, Debt default, External debt, Financial contagion, Financial sector policy and analysis, Imports, International reserves, International trade, Portfolio investment\n- Keywords: A. measuring interconnectedness, assessing contagion, bystander economy, centrality measure, Contagion, Crises, Debt default, Financial contagion, Global, Imports, International reserves, Network, network centrality, Portfolio investment, Stress-test"
    },
    {
      "heading": "Implications and interpretation (as presented)",
      "content": "- The multilayered network and stress-testing results indicate non-linearity in contagion dynamics and sizable spillovers to economies not directly involved in the initial default.\n- This suggests a need to consider systemic importance beyond conventional metrics of size or openness.\n\nIMF Working Paper No. 2022/171, September 2, 2022\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2022/09/02/the-systemic-impact-of-debt-default-in-a-multilayered-global-network-model-522832"
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    "Authors: Nathan Porter, Camilo E Tovar Mora, Juan P Trevino, Johannes Eugster, Theofanis Papamichalis",
    "Published: September 2, 2022",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798400218712.001",
    "Title: The Systemic Impact of Debt Default in a Multilayered Global Network Model",
    "Authors: Nathan Porter, Camilo E Tovar Mora, Juan P Trevino, Johannes Eugster, Theofanis Papamichalis",
    "Date: September 2, 2022",
    "Series: Working Paper No. 2022/171",
    "Issue: 171",
    "Volume: 2022",
    "Pages: 25",
    "DOI: https://doi.org/10.5089/9798400218712.001",
    "ISBN: 9798400218712",
    "ISSN: 1018-5941",
    "Core questions:",
    "Methodology:",
    "Economic and financial contagion are highly non-linear.",
    "Many bystander economies can experience significant negative effects as the initial default is spread through the network.",
    "The results imply that many economies might be systemically more important than what conventional measures of size or openness might suggest.",
    "Subjects: Balance of payments, Central banks, Debt default, External debt, Financial contagion, Financial sector policy and analysis, Imports, International reserves, International trade, Portfolio investment",
    "Keywords: A. measuring interconnectedness, assessing contagion, bystander economy, centrality measure, Contagion, Crises, Debt default, Financial contagion, Global, Imports, International reserves, Network, network centrality, Portfolio investment, Stress-test",
    "The multilayered network and stress-testing results indicate non-linearity in contagion dynamics and sizable spillovers to economies not directly involved in the initial default.",
    "This suggests a need to consider systemic importance beyond conventional metrics of size or openness.",
    "**Working Paper**"
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