European Financial Contagion

Neil Irwin and Washington Post graphic designers Wilson Andrews and Alicia Parlapiano provided an excellent rundown of the crisis in European sovereign debt. The image at left is a representation of their interactive graphic showing vulnerability in banking and trade as a percentage of gross domestic product. The line thickness represents how much is at stake, and when you mouse over a single country its connecting lines become the only ones visible.

Irwin explains that the contagion effect spreads “when investors see one country encounter financial problems” and then “doubt the health of other countries that seem to share economic or even political characteristics.”

It also has “much to do with actual economic links among countries. Researchers have identified financial ties in particular as responsible for the ‘fast and furious’ spread of crisis from one country to another. Trading activity between countries, however, can propagate economic sickness more slowly.”

Worth a visit.

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