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Journal of Economic Integration 2011 June;26(2) :197-216.
DOI: https://doi.org/10.11130/jei.2011.26.2.197
Global Crises: A Network Perspective on the Economic Integration
Ali Leila 
University of Poitiers
Copyright ©2011 Journal of Economic Integration
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.

JEL Classification: E65, F10, F30, F36, G15

Keywords: Contagion | Global Crises | Network Analysis
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