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Assessing Systemic Trade Interconnectedness ; An Empirical Approach


  • Alexander Massara
  • Luca Errico


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.

Suggested Citation

  • Alexander Massara & Luca Errico, 2011. "Assessing Systemic Trade Interconnectedness ; An Empirical Approach," IMF Working Papers 11/214, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:11/214

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    References listed on IDEAS

    1. Anderson, Kym, 2003. "Trade Liberalization, Agriculture, and Poverty in Low-income Countries," WIDER Working Paper Series 025, World Institute for Development Economic Research (UNU-WIDER).
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    12. Shang-Jin Wei, 1996. "Intra-National versus International Trade: How Stubborn are Nations in Global Integration?," NBER Working Papers 5531, National Bureau of Economic Research, Inc.
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    14. Stephen Tokarick, 2003. "Measuring the Impact of Distortions in Agricultural Trade in Partial and General Equilibrium," IMF Working Papers 03/110, International Monetary Fund.
    15. William R. Cline, 2004. "Trade Policy and Global Poverty," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 379.
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    18. Jeffrey Frankel & Andrew Rose, 2002. "An Estimate of the Effect of Common Currencies on Trade and Income," The Quarterly Journal of Economics, Oxford University Press, vol. 117(2), pages 437-466.
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