Economic Volatility Stress Tests for Trade Shocks Under the Pressure of Anti-Globalisation

Tixin Li

doi:doi:10.11648/j.ijber.20231204.14

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Economic Volatility Stress Tests for Trade Shocks Under the Pressure of Anti-Globalisation

Tixin Li

Published in International Journal of Business and Economics Research (Volume 12, Issue 4)

Received: 1 August 2023 Accepted: 17 August 2023 Published: 31 August 2023

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Abstract

Within the background of anti-globalisation, the ramifications of external disturbances on economic stability have garnered heightened scrutiny, emerging as a pivotal concern. Among these disturbances, trade shocks stand out as the most immediate and palpable representation of external perturbations, playing a crucial role in inducing output volatility in economies with a strong external orientation. This research employs a dynamic Leontief model, grounded in industrial linkage theory, and integrates empirical data from 42 predominant industrial sectors within China. The objective is to elucidate the transmission dynamics of import and export trade shocks on economic oscillations via industrial interconnections, utilizing numerical simulation techniques. The findings indicate that export trade shocks introduce volatility into the economy through both a direct pull effect and an indirect combination of pull and push effects, which are further magnified by inter-sectoral linkages. Conversely, import trade shocks can potentially counteract economic expansion by fostering the growth of import-substitution industries.

Published in	International Journal of Business and Economics Research (Volume 12, Issue 4)
DOI	10.11648/j.ijber.20231204.14
Page(s)	154-161
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Anti-Globalisation, Trade Shocks, Industrial Linkages, Economic Fluctuations, Transmission Mechanisms

References

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[4]	He, Y., 2022, “Heterogeneous Stock Traders, Endogenous Bubbles, and Economic Fluctuations,” Finance Res. Lett., 47, p. 102607. Kletzer, K., and Bardhan, P., 1987, “Credit Markets and Patterns of International Trade,” J. Dev. Econ., 27 (1), pp. 57–70.
[5]	Canova, F., and Dellas, H., 1993, “Trade Interdependence and the International Business Cycle,” J. Int. Econ., 34 (1), pp. 23–47.
[6]	Ambler, S., Cardia, E., and Zimmermann, C., 2002, “International Transmission of the Business Cycle in a Multi-Sector Model,” Eur. Econ. Rev., 46 (2), pp. 273–300.
[7]	Burstein, A., Kurz, C., and Tesar, L., 2008, “Trade, Production Sharing, and the International Transmission of Business Cycles,” J. Monet. Econ., 55 (4), pp. 775–795.
[8]	di Giovanni, J., and Levchenko, A. A., 2012, “Country Size, International Trade, and Aggregate Fluctuations in Granular Economies,” J. Polit. Econ., 120 (6), pp. 1083–1132.
[9]	Hove, S., Touna Mama, A., and Tchana Tchana, F., 2015, “Monetary Policy and Commodity Terms of Trade Shocks in Emerging Market Economies,” Econ. Model., 49, pp. 53–71.
[10]	Hu, X., and Hassink, R., 2017, “Exploring Adaptation and Adaptability in Uneven Economic Resilience: A Tale of Two Chinese Mining Regions,” Camb. J. Reg. Econ. Soc., 10 (3), pp. 527–541.
[11]	Agyabeng-Mensah, Y., Afum, E., Baah, C., and Essel, D., 2022, “Exploring the Role of External Pressure, Environmental Sustainability Commitment, Engagement, Alliance and Circular Supply Chain Capability in Circular Economy Performance,” Int. J. Phys. Distrib. Logist. Manag., 52 (5/6), pp. 431–455.
[12]	Yadegaridehkordi, E., Foroughi, B., Iranmanesh, M., Nilashi, M., and Ghobakhloo, M., 2023, “Determinants of Environmental, Financial, and Social Sustainable Performance of Manufacturing SMEs in Malaysia,” Sustain. Prod. Consum., 35, pp. 129–140.
[13]	Chen, L., Li, W., Yuan, K., and Zhang, X., 2022, “Can Informal Environmental Regulation Promote Industrial Structure Upgrading? Evidence from China,” Appl. Econ., 54 (19), pp. 2161–2180.
[14]	Zhu, J., and Lin, B., 2022, “Economic Growth Pressure and Energy Efficiency Improvement: Empirical Evidence from Chinese Cities,” Appl. Energy, 307, p. 118275.
[15]	Hickel, J., Dorninger, C., Wieland, H., and Suwandi, I., 2022, “Imperialist Appropriation in the World Economy: Drain from the Global South through Unequal Exchange, 1990–2015,” Glob. Environ. Change, 73, p. 102467. Leontief, W., 1986, Input-Output Economics, Oxford University Press.
[16]	Leontief, W., 1986, Input-Output Economics, Oxford University Press.

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Tixin Li. (2023). Economic Volatility Stress Tests for Trade Shocks Under the Pressure of Anti-Globalisation. International Journal of Business and Economics Research, 12(4), 154-161. https://doi.org/10.11648/j.ijber.20231204.14

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ACS Style

Tixin Li. Economic Volatility Stress Tests for Trade Shocks Under the Pressure of Anti-Globalisation. Int. J. Bus. Econ. Res. 2023, 12(4), 154-161. doi: 10.11648/j.ijber.20231204.14

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AMA Style

Tixin Li. Economic Volatility Stress Tests for Trade Shocks Under the Pressure of Anti-Globalisation. Int J Bus Econ Res. 2023;12(4):154-161. doi: 10.11648/j.ijber.20231204.14

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@article{10.11648/j.ijber.20231204.14,
  author = {Tixin Li},
  title = {Economic Volatility Stress Tests for Trade Shocks Under the Pressure of Anti-Globalisation},
  journal = {International Journal of Business and Economics Research},
  volume = {12},
  number = {4},
  pages = {154-161},
  doi = {10.11648/j.ijber.20231204.14},
  url = {https://doi.org/10.11648/j.ijber.20231204.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20231204.14},
  abstract = {Within the background of anti-globalisation, the ramifications of external disturbances on economic stability have garnered heightened scrutiny, emerging as a pivotal concern. Among these disturbances, trade shocks stand out as the most immediate and palpable representation of external perturbations, playing a crucial role in inducing output volatility in economies with a strong external orientation. This research employs a dynamic Leontief model, grounded in industrial linkage theory, and integrates empirical data from 42 predominant industrial sectors within China. The objective is to elucidate the transmission dynamics of import and export trade shocks on economic oscillations via industrial interconnections, utilizing numerical simulation techniques. The findings indicate that export trade shocks introduce volatility into the economy through both a direct pull effect and an indirect combination of pull and push effects, which are further magnified by inter-sectoral linkages. Conversely, import trade shocks can potentially counteract economic expansion by fostering the growth of import-substitution industries.},
 year = {2023}
}

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TY  - JOUR
T1  - Economic Volatility Stress Tests for Trade Shocks Under the Pressure of Anti-Globalisation
AU  - Tixin Li
Y1  - 2023/08/31
PY  - 2023
N1  - https://doi.org/10.11648/j.ijber.20231204.14
DO  - 10.11648/j.ijber.20231204.14
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 154
EP  - 161
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20231204.14
AB  - Within the background of anti-globalisation, the ramifications of external disturbances on economic stability have garnered heightened scrutiny, emerging as a pivotal concern. Among these disturbances, trade shocks stand out as the most immediate and palpable representation of external perturbations, playing a crucial role in inducing output volatility in economies with a strong external orientation. This research employs a dynamic Leontief model, grounded in industrial linkage theory, and integrates empirical data from 42 predominant industrial sectors within China. The objective is to elucidate the transmission dynamics of import and export trade shocks on economic oscillations via industrial interconnections, utilizing numerical simulation techniques. The findings indicate that export trade shocks introduce volatility into the economy through both a direct pull effect and an indirect combination of pull and push effects, which are further magnified by inter-sectoral linkages. Conversely, import trade shocks can potentially counteract economic expansion by fostering the growth of import-substitution industries.
VL  - 12
IS  - 4
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Author Information

Tixin Li

School of Economics and Management, Kunming University, Kunming, China

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APA Style

Tixin Li. (2023). Economic Volatility Stress Tests for Trade Shocks Under the Pressure of Anti-Globalisation. International Journal of Business and Economics Research, 12(4), 154-161. https://doi.org/10.11648/j.ijber.20231204.14

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ACS Style

Tixin Li. Economic Volatility Stress Tests for Trade Shocks Under the Pressure of Anti-Globalisation. Int. J. Bus. Econ. Res. 2023, 12(4), 154-161. doi: 10.11648/j.ijber.20231204.14

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AMA Style

Tixin Li. Economic Volatility Stress Tests for Trade Shocks Under the Pressure of Anti-Globalisation. Int J Bus Econ Res. 2023;12(4):154-161. doi: 10.11648/j.ijber.20231204.14

Copy | Download

@article{10.11648/j.ijber.20231204.14,
  author = {Tixin Li},
  title = {Economic Volatility Stress Tests for Trade Shocks Under the Pressure of Anti-Globalisation},
  journal = {International Journal of Business and Economics Research},
  volume = {12},
  number = {4},
  pages = {154-161},
  doi = {10.11648/j.ijber.20231204.14},
  url = {https://doi.org/10.11648/j.ijber.20231204.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20231204.14},
  abstract = {Within the background of anti-globalisation, the ramifications of external disturbances on economic stability have garnered heightened scrutiny, emerging as a pivotal concern. Among these disturbances, trade shocks stand out as the most immediate and palpable representation of external perturbations, playing a crucial role in inducing output volatility in economies with a strong external orientation. This research employs a dynamic Leontief model, grounded in industrial linkage theory, and integrates empirical data from 42 predominant industrial sectors within China. The objective is to elucidate the transmission dynamics of import and export trade shocks on economic oscillations via industrial interconnections, utilizing numerical simulation techniques. The findings indicate that export trade shocks introduce volatility into the economy through both a direct pull effect and an indirect combination of pull and push effects, which are further magnified by inter-sectoral linkages. Conversely, import trade shocks can potentially counteract economic expansion by fostering the growth of import-substitution industries.},
 year = {2023}
}

Copy | Download

TY  - JOUR
T1  - Economic Volatility Stress Tests for Trade Shocks Under the Pressure of Anti-Globalisation
AU  - Tixin Li
Y1  - 2023/08/31
PY  - 2023
N1  - https://doi.org/10.11648/j.ijber.20231204.14
DO  - 10.11648/j.ijber.20231204.14
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 154
EP  - 161
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20231204.14
AB  - Within the background of anti-globalisation, the ramifications of external disturbances on economic stability have garnered heightened scrutiny, emerging as a pivotal concern. Among these disturbances, trade shocks stand out as the most immediate and palpable representation of external perturbations, playing a crucial role in inducing output volatility in economies with a strong external orientation. This research employs a dynamic Leontief model, grounded in industrial linkage theory, and integrates empirical data from 42 predominant industrial sectors within China. The objective is to elucidate the transmission dynamics of import and export trade shocks on economic oscillations via industrial interconnections, utilizing numerical simulation techniques. The findings indicate that export trade shocks introduce volatility into the economy through both a direct pull effect and an indirect combination of pull and push effects, which are further magnified by inter-sectoral linkages. Conversely, import trade shocks can potentially counteract economic expansion by fostering the growth of import-substitution industries.
VL  - 12
IS  - 4
ER  -

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