This paper investigates the inequality in exposure to economic shocks across the global firm-level supply network. Using global, firm-level supply network data, the authors estimate a country's exposure to direct and indirect economic losses caused by company failures in other countries. They find that richer countries expose poorer countries to systemic risk more strongly than vice-versa, and that this risk is highly concentrated. Importantly, higher risk levels are not compensated by risk premiums in GDP levels or higher GDP growth, highlighting a new dimension of global inequality that disproportionately affects the poor during supply shock crises.

Abhijit Chakraborty, Tobias Reisch, Christian Diem, Pablo Astudillo-Estévez, Stefan Thurner