Measuring Global Economic Interdependence: A Hierarchical Network Approach

17 Pages Posted: 19 Dec 2013

See all articles by David Matesanz Gomez

David Matesanz Gomez

Universidad de Oviedo - Facultad de Economicas

Benno Torgler

Queensland University of Technology; CREMA; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Guillermo Ortega

Universidad Nacional de Quilmes

Date Written: December 2013

Abstract

This paper investigates the business cycle co‐movement across countries and regions since 1950 as a measure for quantifying the economic interdependence in the ongoing globalisation process. Our methodological approach is based on analysis of a correlation matrix and the networks it contains. Such an approach summarises the interaction and interdependence of all elements, and it represents a more accurate measure of the global interdependence involved in an economic system. Our results show (1) the dynamics of interdependence has been driven more by synchronisation in regional growth patterns than by the synchronisation of the world economy, and (2) world crisis periods dramatically increase the global co‐movement in the world economy.

Suggested Citation

Gomez, David Matesanz and Torgler, Benno and Ortega, Guillermo, Measuring Global Economic Interdependence: A Hierarchical Network Approach (December 2013). The World Economy, Vol. 36, Issue 12, pp. 1632-1648, 2013. Available at SSRN: https://ssrn.com/abstract=2369607 or http://dx.doi.org/10.1111/twec.12080

David Matesanz Gomez (Contact Author)

Universidad de Oviedo - Facultad de Economicas

Campus del Cristo, s/n
Oviedo, Asturias 33071
Spain

Benno Torgler

Queensland University of Technology ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia

CREMA

Gellertstrasse 18
Basel
Zurich, CH 8006
Switzerland

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

Guillermo Ortega

Universidad Nacional de Quilmes ( email )

Buenos Aires
Argentina

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