Event

A Method for Quantitative Trade Policy Design

18 December 2024
Expired!
3:00 pm - 4:00 pm

Location

Complexity Science Hub
Complexity Science Hub, Metternichgasse 8, 1030 Vienna

  • Attendance on site
  • Language EN

Event

A Method for Quantitative Trade Policy Design

Understanding the risk of international trade shocks is critical to achieving economic resilience and national security. Intricate supply chain dependencies make this risk difficult to quantify and mitigate, as demonstrated by the suppression of global GDP during the COVID-19 pandemic. Ecological theory and trade studies suggest increasing the diversity of trading partners helps nations resist supply shocks. Here we introduce a unique, data-driven model that links the diversity of suppliers to an importing nation’s risk of trade shock using a simple, physical distance-based metric for diversity. We demonstrate that nations with low import supplier diversity are more susceptible to shocks regardless of hazard or commodity type. We also assess each nation’s current diversity and resilience and suggest how they might improve those features. The model provides general guidance to source goods from suppliers across various distances and allows nations to set and monitor quantitative resilience targets to withstand a certain frequency and intensity of disruptions through a blend of international imports, domestic production, and strategic reserves. This model provides a robust quantitative basis for the design of national policies for economic development, security, infrastructure, and trade that achieve national resilience objectives

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Speaker(s)

Kat Fowler

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