Enhancing Surveillance: Interconnectedness and Clusters
The global crisis of 2008–09 and its ongoing aftershocks have focused attention on the possible risks associated with global interconnectedness. Absent a satisfactory theory and empirics on the relationships among interconnectedness, stability, and policies, however, following through on the calls in the Triennial Surveillance Review for ncorporating interconnectedness into the Fund’s policy and risk analysis is challenging. This paper characterizes the architecture of cross-border trade and financial interconnectedness and points to how it might inform the Fund’s work. more »
