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

Author

Listed:
  • Ms. Yevgeniya Korniyenko
  • Magali Pinat
  • Brian Dew

Abstract

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.

Suggested Citation

  • Ms. Yevgeniya Korniyenko & Magali Pinat & Brian Dew, 2017. "Assessing the Fragility of Global Trade: The Impact of Localized Supply Shocks Using Network Analysis," IMF Working Papers 2017/030, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2017/030
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    Citations

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    Cited by:

    1. Hu, Xiaoqian & Wang, Chao & Lim, Ming K. & Chen, Wei-Qiang, 2020. "Characteristics of the global copper raw materials and scrap trade systems and the policy impacts of China's import ban," Ecological Economics, Elsevier, vol. 172(C).
    2. Alessandro Borin & Gianmarco Cariola & Elena Gentili & Andrea Linarello & Michele Mancini & Tullia Padellini & Ludovic Panon & Enrico Sette, 2023. "Inputs in geopolitical distress: a risk assessment based on micro data," Questioni di Economia e Finanza (Occasional Papers) 819, Bank of Italy, Economic Research and International Relations Area.
    3. João Amador & Sónia Cabral & Rossana Mastrandrea & Franco Ruzzenenti, 2018. "Who’s Who in Global Value Chains? A Weighted Network Approach," Open Economies Review, Springer, vol. 29(5), pages 1039-1059, November.
    4. Ascari, Guido & Bonam, Dennis & Smadu, Andra, 2024. "Global supply chain pressures, inflation, and implications for monetary policy," Journal of International Money and Finance, Elsevier, vol. 142(C).
    5. Caravella, Serenella & Crespi, Francesco & Cucignatto, Giacomo & Guarascio, Dario, 2023. "Technological Sovereignty and Strategic Dependencies: The case of the Photovoltaic Supply Chain," GLO Discussion Paper Series 1330, Global Labor Organization (GLO).
    6. Jinran Chen, 2024. "Prediction of global trade network evolution with uncertain multi-step time series forecasting method," Fuzzy Optimization and Decision Making, Springer, vol. 23(3), pages 387-414, September.
    7. Zhang, Si Ying, 2021. "Using equity market reactions and network analysis to infer global supply chain interdependencies in the context of COVID-19," Journal of Economics and Business, Elsevier, vol. 115(C).
    8. Carlo Piccardi & Lucia Tajoli, 2018. "Complexity, centralization, and fragility in economic networks," PLOS ONE, Public Library of Science, vol. 13(11), pages 1-13, November.
    9. Benoit, Florence & Connell-Garcia, William & Herghelegiu, Cristina & Pasimeni, Paolo, 2022. "Detecting and Analysing Supply Chain Disruption," Single Market Economics Papers WP2022/1, Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (European Commission), Chief Economist Team.
    10. Evans, Olaniyi, 2019. "The effects of US-China trade war and Trumponomics," MPRA Paper 93682, University Library of Munich, Germany.

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