Assessing Systemic Trade Interconnectedness - an Empirical Approach

25 Pages Posted: 21 Sep 2011

See all articles by Alexander Massara

Alexander Massara

International Monetary Fund (IMF)

Luca Errico

International Monetary Fund (IMF)

Date Written: September 2011

Abstract

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.

Keywords: Cross country analysis, Direction of trade, International trade, Trade integration

Suggested Citation

Massara, Alexander and Errico, Luca, Assessing Systemic Trade Interconnectedness - an Empirical Approach (September 2011). IMF Working Paper No. 11/214, Available at SSRN: https://ssrn.com/abstract=1930794

Alexander Massara (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Luca Errico

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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