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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.
3. Economic Vulnerability
* 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.