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Regional Blocs and the Transmission of US Shocks: A GVAR Modeling Approach

Author

Listed:
  • Anguiano-Pita Javier Emmanuel

    (Mexican Secretariat for Science, Humanities, Technology, and Innovation, Mexico City, Mexico)

  • Ruiz-Porras Antonio

    (University of Guadalajara, Zapopan, Mexico)

Abstract

We analyze the role of trade linkages in the international transmission of shocks originating from the United States. We also study the effects of shocks on GDP and imports. This study employs a GVAR model and uses quarterly data for 31 countries from 1994Q1 to 2019Q4. The main findings are as follows: 1) The U.S. economy serves as a significant source of external shocks; 2) the magnitude and persistence of responses to these shocks vary across countries and regions; 3) economies in North and South America are more vulnerable to U.S. output and trade shocks than economies in the Asia-Pacific and Middle Eastern regions; 4) both North and South American economies, along with European economies, experience significant decreases in output in response to negative shocks to U.S. imports; and 5) trade is a crucial mechanism for the international transmission of shocks. These findings are valuable for understanding the transmission mechanisms of international shocks and the evolution of the global economy.

Suggested Citation

  • Anguiano-Pita Javier Emmanuel & Ruiz-Porras Antonio, 2025. "Regional Blocs and the Transmission of US Shocks: A GVAR Modeling Approach," Journal of Globalization and Development, De Gruyter, vol. 16(1), pages 75-104.
    • Handle: RePEc:bpj:globdv:v:16:y:2025:i:1:p:75-104:n:1005
    DOI: 10.1515/jgd-2024-0066
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    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • F60 - International Economics - - Economic Impacts of Globalization - - - General

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