MSc thesis | Toulouse School of Economics × University of Zurich | 2021
Moving beyond efficiency: a novel framework to measure trade-flow resilience
COVID stress-tested global trade in real time. I set up a collaboration with the University of Zurich and developed a way to measure trade-flow resilience where none existed before.
- 2
- dimensions of resilience: recovery and reorientation
- MRSTAR
- multiple-regime smooth transition model
The opportunity
The pandemic was a rare natural experiment: supply chains around the world were hit at once, and you could watch how trade flows reacted. But there was no established way to measure how resilient a trade flow is. I set up a collaboration with the University of Zurich to build one.
The framework
I defined resilience along two dimensions: recovery, a trade flow’s ability to bounce back after a shock, and reorientation, its ability to move to a more desirable state. I then showed how both can be parametrised in a multiple-regime smooth transition autoregressive (MRSTAR) model.
- Tested the method’s limits in Monte Carlo simulations and documented the caveats for practical use.
- Applied it to German car exports and US consumer-electronics imports using UN Comtrade data.
- Descriptive evidence suggests that well-established trade relationships are more resilient.