Crisis severity and the international trade network
Marianna Endresz and
Frauke Skudelny
No 1971, Working Paper Series from European Central Bank
Abstract:
In this paper we analyse the role of the international trade network for the strength of the global recession across countries. The novelty of our paper is the use of value-added trade data to capture the importance of trade network structure. We estimate with BMA techniques how far network indicators measuring interlinkages in terms of value added trade has explanatory power both for the length and the depth of the recent crisis once we control for pre-crisis macroeconomic fundamentals. Our main findings are that the macroeconomic control variables with the strongest explanatory power for the length and the depth of the crisis are the growth rates of credit and of the real effective exchange rate in the pre-crisis period and, though to a lesser extent, GDP and inflation growth over the same period and pre-crisis foreign exchange reserves. Government debt, the GVC participation index and net foreign assets have very little explanatory power in the BMA estimations. The models JEL Classification: F14, C45, C52, C67
Keywords: Bayesian model averaging; crisis indicators; network indicators; value added trade; WIOD (search for similar items in EconPapers)
Date: 2016-10
New Economics Papers: this item is included in nep-ifn, nep-int and nep-opm
Note: 176751
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp1971.en.pdf (application/pdf)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20161971
Access Statistics for this paper
More papers in Working Paper Series from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().