Global Crises: A Network Perspective on the Economic Integration

Ali Leila ()
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Ali Leila: University of Poitiers, Postal: CRIEF-MOFIB, University of Poitiers, 2 Rue Jean Carbonnier Bât A1 (BP 623),, 86022 Poitiers Cedex, France

Journal of Economic Integration, 2011, vol. 26, 197-216

Abstract:

This paper borrows from network analysis to study the impact of trade and financial integrations on output drop during the 2008-2009 crisis. Using network analysis, I show that international trade and financial linkages have different effects on economic activity. Relationships involving the trade of goods appear to explain the severity of the crisis to some extent, whereas financial relationships do not. This finding suggests that real shocks that occur through the trade channel cannot be easily and quickly absorbed by connected economies, while financial shocks can be absorbed more easily among partners. The global shift from complex products to safer assets in the wake of the subprime crisis supports this view.

Keywords: Contagion; Global Crises; Network Analysis (search for similar items in EconPapers)
JEL-codes: E65 F10 F30 F36 G15 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0535

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