DHL Global Connectedness Index 2014

DHL Global Connectedness Index 2014
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Table 1.1
Weighted Average Imbalances by Component, 2005 vs. 2013 31
2005 Weighted
Average
Imbalance
2013 Weighted
Average
Imbalance
Change From
2005 to 2013
Weighted
Average
Imbalance
1 Students 63% 1 Students 58% 1 Printed Publications Trade 8%
2 Migrants 51% 2 Migrants 54% 2 Portfolio Equity Flows 6%
3 Portfolio Equity Flows 48% 3 Portfolio Equity Flows 53% 3 Services Trade 4%
4 International Phone Calls 38% 4 International Phone Calls 39% 4 Migrants 4%
5 Tourists 34% 5 FDI Flows 36% 5 FDI Flows 3%
6 FDI Flows 33% 6 Printed Publications Trade 36% 6 International Phone Calls 2%
7 Printed Publications Trade 27% 7 Tourists 32% 7 FDI Stocks 0%
8 Portfolio Equity Stocks 25% 8 Portfolio Equity Stocks 22% 8 Tourists -2%
9 FDI Stocks 22% 9 FDI Stocks 21% 9 Merchandise Trade -3%
10 Services Trade 13% 10 Services Trade 17% 10 Portfolio Equity Stocks -3%
11 Merchandise Trade 13% 11 Merchandise Trade 11% 11 Students -5%
While trade surpluses and deficits are the international imbalances that attract the most attention, imbalances on other components of the index are as much
as five times larger, and imbalances on more components increased than decreased since 2005.
Directionality
Directionality imposes another doubling of data requirements
and, probably more significantly, would require
a second structural change in other indexes, alongside
attention to entire distributions rather than one summary
statistic. We have just begun to explore the implications of
directionality in our own work so the principal point to be
made for now is that data on directionality need to be collected
before one can even start addressing the issues that
it raises.
can also contribute to growth. Most countries also place
far more emphasis on attracting tourists than on encouraging
their citizens to go abroad, and there is a great deal
of concern in many countries’ about the directionality of
information flows and their cultural implications. 32
Our preliminary analysis of directionality, however,
already points to two interesting findings, illustrated in
Table 1.1. First, while most of the attention to imbalances
in international interactions focuses on trade, imbalances
on the other components of the index are all larger, up
to five times as much. Second, that imbalances on more
components of the index increased than decreased over
2005–2013 underscores the value of tracking them. 31
A final reason why it is important to incorporate directionality
into discussions of globalization is that it is a matter
of great concern to policymakers. Many adopt mercantilist
policies, favoring exports over imports, even against the
advice of some economists who emphasize that imports