Lelo Nxumalo

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Mapping the Blast Radius: What Happens When the "World's Factory" Stops?

In global trade, "efficiency" often masks "fragility." We know that China is central to the global electronics supply chain, but how central? And if that node were to go dark, who would feel the shockwaves first? To answer this, I moved beyond standard trade statistics and built a network simulation using the OECD Inter-Country Input-Output (ICIO) Tables (2023 Edition) . This dataset maps the DNA of the global economy, tracking every dollar of input across 66 countries and 45 industries. 1. The Blast Radius: Tracing the Contagion I treated the global economy as a directed graph and simulated a total supply shock to Chinese Electronics (CHN_C26) . By tracing the flow of inputs across three tiers of buyers, I visualized the "Blast Radius" of this disruption. Fig 1: The Supply Chain Cascade. The shock originates in China (Red) and immediately hits "Tier 1" assembly hubs (Dark Blue) before cascading to global consumers...

Who Really Owns the Factory? Mapping the Corporate Control of Global Trade

In my previous post, we looked at where value is created in the global economy. We saw how a "German" car is actually a European collaborative effort. But that map leaves one critical question unanswered: Who owns the factory? Does a country own its own production, or is it merely a host for foreign capital? To answer this, I dove into the OECD Activity of Multinational Enterprises (AMNE) database. By distinguishing between domestic and foreign-owned firms, we can reveal the "hidden architecture" of corporate control. 1. The Sovereignty Gap: Who Relies on Foreign Capital? The first metric I calculated is the Foreign Penetration Ratio : the percentage of a nation's total Gross Value Added (GVA) that is generated by foreign-controlled affiliates. The results reveal a stark divide in the global economy between "Sovereign Giants" and "Global Hubs." Fig 1: The "Hubs" vs. The "Giants" — Sha...

A Network Analysis of Global Value Chains (GVCs)

We often speak of trade in simple, bilateral terms: "Germany exports cars to France" or "China ships phones to the US." But in a modern hyper-connected economy, these statements are deceptively simple. A "German" car might contain a Polish engine, Italian electronics, and Chinese batteries, while a "Chinese" phone may effectively be a bundle of Korean chips and American intellectual property wrapped in plastic. To understand who really creates value in the global economy, we cannot rely on standard customs data. We need to look deeper. The interactive network map below does exactly that, peeling back the layers of "Gross Trade" to reveal the Global Value Chains (GVCs) underneath. Global Value Chain Network (2021) Interactive Map: Hover over any arrow above to see the exact trade volume (USD Millions). Click an arrow to highlight the path. The Data Problem: The "$1,000 iPhone" Illusion ...

Taming the "Fat Tail": Decrypting Climate Disaster Costs

In the world of risk modeling, natural disasters are notoriously difficult to quantify. While frequency is relatively predictable, economic impact is chaotic. A single "Black Swan" event—like the 2011 Tohoku Earthquake or the 2004 Indian Ocean Tsunami—can cause more economic damage in an afternoon than thousands of smaller events combined over a decade. I analyzed global disaster data from EM-DAT (2000-2025) to understand these patterns. Below, Wi look at the geography of these events and, crucially, how I am using a Composite Log-Normal Pareto model to estimate their economic costs when data is missing. The Geography of Risk To understand the scope, I first look at where these events occur. As the data shows, the distribution is far from uniform. Figure 1: Natural Disasters by Region. Asia is the undisputed global epicenter of natural disaster frequency, accounting for nearly double the event count o...

Nowcasting Global Trade: A RAS Simulation

In the fast-moving world of international trade, data is often the bottleneck. Detailed Inter-Country Input-Output (ICIO) tables—the maps that tell us exactly how many semiconductors Japan sold to Germany—often lag by years. Yet, policymakers and analysts need to know what the world looks like today . How do we reconcile the detailed structural data of the past with the aggregate economic realities of the present? In this analysis, we deployed the RAS Method (Bi-Proportional Adjustment) to "Nowcast" the 2022 global trade structure using only historical patterns and current headlines. The Methodology: A Blind Simulation To rigorously test the RAS capability, we set up a "Blind Simulation" using Python. Although we possessed the full 2022 Input-Output tables, we deliberately ignored the interior data —the specific supply chain connections between countries. Instead, we fed the algorithm only two specific ...

Fiscal Limits of Social Protection in Turkey: A General Equilibrium Analysis

Executive Summary This analysis evaluates the macroeconomic impact of expanding social protection (unemployment benefits) in Turkey by 33%. Using a micro-founded DSGE model calibrated to the Turkish economy, we find that financing methods determine policy success. Labor Tax Financing (The "Death Spiral"): Attempting to fund benefits via labor taxes causes the formal sector to collapse. The model identifies a "Fiscal Cliff" at a 40% tax rate. VAT Financing (The Viable Path): A Consumption Tax (VAT) increase from 18% to 20.6% successfully funds the program with significantly less damage to employment. 1. Country Context: The Turkish Economy in 2024-2025 To understand the simulation results, it is essential to situate them within Turkey's current macroeconomic reality. The economy is currently navigating a "rebalancing" phase ch...