Shocks in a highly interlinked global economy
This report analyses the broad risks associated with sectoral output disruptions both
domestically and abroad, examining several exposure metrics. The results indicate
that domestic shocks generally have larger sectoral impacts than foreign shocks. In
most cases, foreign production disruptions cause minimal domestic output responses,
suggesting that domestic and international linkages, along with economic adjustment
mechanisms, tend to dampen rather than amplify foreign shocks. However, a cumulation
of adverse shocks can significantly affect specific sectors, with manufacturing sectors
are on average much more exposed to foreign output shocks than services and agrifood
given their greater internationalisation of output and inputs. Economies with strong
backward and forward global value chain links to major foreign economies also tend
to be more exposed to foreign shocks.
Available from June 26, 2024
In series:OECD Trade Policy Papersview more titles