Evolution of indirect vulnerabilities in interdependent economic networks

Real-world systems can generally be represented as networks of interacting parts, and the topology of those networks can lead to certain risks for the system or specific nodes. Subtler and inadequately studied are indirect vulnerabilities that arise when different networks are linked together and become interdependent. This study focuses on indirect vulnerabilities that arise from interdependent networks of trade and investments. In such interdependent networks, countries can act as conduits through which nodes in one network can influence nodes in the other. These indirect vulnerabilities vary over time due to factors such as trade patterns, economic conditions, policy changes, and geopolitical shifts. Here, we examine the temporal patterns of indirect vulnerabilities of the U.S. to China from 2010 to 2019 using the Potential Indirect Vulnerability Index. We found that nearly 90% of the top 20 countries during the study period were in the Indo-Pacific region with geographical proximity to China. Of those in the top 20, 9 were among the 11 original members of the Trans-Pacific Partnership agreement, with Vietnam moving from 11 t h place in 2014 to 1 s t by 2019. We also found that, among the top 20 vulnerability-inducing commodities, ores induced higher levels of indirect vulnerability over the study period. Our methodology and results not only offer insights into the temporal pattern of economic vulnerabilities in interdependent networks but also provide a foundation for anticipating future risks and managing the resilience of complex systems.

Interdependence · Economic and Technological Innovation · Game Theory and Applications · Infrastructure Resilience and Vulnerability Analysis