Growth and Resilience Dialogue 15/02/2018

Inherent Economic Vulnerability

The present author associates economic vulnerability with high exposure to economic shocks (Briguglio, 2016)*, due to:  High degree of trade openness (dependence on exports and imports) rendering an economy highly exposed to shocks.  High degree of export concentration (dependence on a few categories of exports) exacerbating exposure to shocks.  High dependence on strategic imports , including food and fuel, exacerbating exposure to shocks. These imports are highly price and income inelastic.  Proneness to natural disasters , leading to economic shocks and exacerbating the effects of external trade shocks.

* Briguglio, L. P. (2016). Exposure to external shocks and economic resilience of countries: evidence from global indicators. Journal of Economic Studies, 43(6), 1057-1078.

3. Economic Vulnerability