Measuring the external risk in the United Kingdom

Abstract

This paper aims to describe the evolution of the external risk in the United Kingdom between 1961 and 2008. We first present a theoretical description of the risk indicator. Then, we calculate this measure for the British economy in the period of study. In general, the results reveal a very small increase of external risk. Finally, the relationship between the two dimensions of external risk: trade openness and external volatility is analysed.trade openness, terms of trade volatility, external risk, United Kingdom