CSH scientist Tobias Reisch will present work pursued together with Abhijit Chakraborty, Christian Diem and Stefan Thurner as online talk at NetSci 2022. His talk is part of Session 3E, Economic Networks 1.
The session starts at 14:50 CEST.
Tobias’ talk starts at 15:50 CEST.
Abstract:
For centuries, national economies created wealth by engaging in international trade and production. The resulting international supply networks not only increase wealth for countries, but also create systemic risk: economic shocks, triggered by company failures in one country, may propagate to other countries.
Using global supply network data on the firm-level, we present a method to estimate a country’s exposure to direct and indirect economic losses caused by the failure of a company in another country. We show the network of systemic risk-flows across the world. We find that rich countries expose poor countries much more to systemic risk than the other way round. We demonstrate that higher systemic risk levels are not compensated with a risk premium in GDP, nor do they correlate with economic growth. Systemic risk around the globe appears to be distributed more unequally than wealth.
These findings put the often praised benefits for developing countries from globalized production in a new light, since they relate them to the involved risks in the production processes. Exposure risks present a new dimension of global inequality, that most affects the poor in supply shock crises. It becomes fully quantifiable with the proposed method.
About NetSci 2022
NetSci 2022 takes place from July 25–29, 2022 online and onsite in Shanghai.
NetSci 2022, the flagship conference of the Network Science Society, aims to bring together leading researchers and practitioners working in the emerging research area of network science. The conference fosters multi-disciplinary communication and collaboration in network science research across computer and information sciences, physics, mathematics, statistics, the life sciences, medicine, food science, neuroscience, environmental sciences, social sciences, finance and business, arts and design.
In 2022, the conference is hosted in Shanghai, one of the world’s largest seaports and a major center for international economics, finance, and innovation of China. Due to the ongoing COVID-19 pandemic, the conference will take place online.