Graphs and commentary from Goldman Sachs economists:
*DMs not overly exposed to EM through trade channel*
It is true that EM’s contribution both to global growth and to DM exports has increased significantly over the last decade or two. But the direct trade linkages to the major DM economies are still relatively small, in part because the major DM economies are still relatively closed economies. Gross exports to EM are a little less than 5% of GDP for the US, for example. Reported sales exposure of S&P 500 companies to EM is around 5% and the BEA estimates profit exposure at around 6%. As Exhibit 4 shows, Europe is somewhat more exposed, although Germany’s high exposure partly reflects its supply chains in Central Europe.
Continue reading: Trade and financial-channel exposures to emerging markets Reported by FT.com 16 hours ago.
*DMs not overly exposed to EM through trade channel*
It is true that EM’s contribution both to global growth and to DM exports has increased significantly over the last decade or two. But the direct trade linkages to the major DM economies are still relatively small, in part because the major DM economies are still relatively closed economies. Gross exports to EM are a little less than 5% of GDP for the US, for example. Reported sales exposure of S&P 500 companies to EM is around 5% and the BEA estimates profit exposure at around 6%. As Exhibit 4 shows, Europe is somewhat more exposed, although Germany’s high exposure partly reflects its supply chains in Central Europe.
Continue reading: Trade and financial-channel exposures to emerging markets Reported by FT.com 16 hours ago.