Network Effects of International Shocks and Spillovers

July 7, 2015

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Alexei P Kireyev, and Andrei Leonidov. Network Effects of International Shocks and Spillovers, (USA: International Monetary Fund, 2015) accessed December 26, 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

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.

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

Keywords: Demand shock, Epicenter country, Export earnings, Export shock, Export-import matrix, Exports, Global, Import shock, Imports, Network, Shock spillover, Shocks, Spillover, Spillovers, Trade, Trade balance, WP

Publication Details

Pages:

43
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/149
Stock No:

WPIEA2015149
ISBN:

9781513542928
ISSN:

1018-5941

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