Measuring the dynamics of APEC output connectedness

We examine the dynamics of output connectedness of Asian Pacific Economic Cooperation (APEC) economies using time-varying, region-specific, generalised connectedness measures. We find that the connectedness of APEC economies with the rest of the world is quite substantial, with the 2008-09 Global Financial Crisis increasing the connectedness measures above their precrisis levels. The USA, China, and Korea are shown to be systemically important and to dominate APEC's real activities, while outside the APEC region the roles of India and the UK are also non-negligible. These results suggest that the majority of APEC economies are considerably open to output shocks from the dominant economies such that policymakers in APEC must be continuously conscious of headwinds originating from these sources.