Assessing Systemic Trade Interconnectedness: An Empirical Approach

September 1, 2011

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Format: Chicago

Alexander Massara, and Luca Errico. Assessing Systemic Trade Interconnectedness: An Empirical Approach, (USA: International Monetary Fund, 2011) accessed December 3, 2024

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

The paper focuses on systemically important jurisdictions in the global trade network, complementing recent IMF work on systemically important financial sectors. Using the IMF's Direction of Trade Statistics (DOTS) database and network analysis, the paper develops a framework for ranking jurisdictions based on trade size and trade interconnectedness indicators using data for 2000 and 2010. The results show a near perfect overlap between the top 25 systemically important trade and financial jurisdictions, suggesting that these ought to be the focus of risk-based surveillance on cross-border spillovers and contagion. In addition, a number of extensions to the approach are developed that can provide a better understanding of trade dynamics at the bilateral, regional, and global levels.

Subject: Exports, Financial contagion, Financial sector policy and analysis, International trade

Keywords: Contagion, Cross-border spillovers, DOTS, Exports, Financial contagion, Global, Interconnectedness, Interconnectedness ranking, Jurisdiction, Jurisdiction j., Network analysis, Size indicator, Systemic, Trade, Trade channel, Trade interconnectedness ranking, Trade relationship, Trade sector, Trade size, WP

Publication Details

Pages:

24
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2011/214
Stock No:

WPIEA2011214
ISBN:

9781463902964
ISSN:

1018-5941

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