The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
Anecdotal evidence suggests the existence of specific choke points in the global trade network
revealed especially after natural disasters (e.g. hard drive components and Thailand flooding,
Japanese auto components post-Fukushima, etc.). Using a highly disaggregated international trade
database we assess the spillover effects of supply shocks from the import of specific goods. Our
goal is to identify inherent vulnerabilities arising from the composition of a country's import basket
and to propose effective mitigation policies. First, using network analysis tools we develop a
methodology for evaluating and ranking the supply fragility of individual traded goods. Next, we
create a country-level measure to determine each country's supply shock vulnerability based on the
composition of their individual import baskets. This measure evaluates the potential negative
supply shock spillovers from the import of each good.