Definition of Spillover effect:
Spillover effects are a type of network effect that increased since globalization in trade and stock markets deepened the financial connections between economies. The Canada-U.S. trade relationship provides an example of spillover effects. This is because the U.S. is Canada’s main market by a wide margin across nearly every export-oriented sector. The effects of a minor U.S. slowdown are amplified by the Canadian reliance on the U.S. market for its own growth.
A secondary effect that follows from a primary effect, and may be far removed in time or place from the event that caused the primary effect.
Spillover effect refers to the impact that seemingly unrelated events in one nation can have on the economies of other nations. Although there are positive spillover effects, the term is most commonly applied to the negative impact a domestic event has on other parts of the world such as an earthquake, stock market crisis, or another macro event.
How to use Spillover effect in a sentence?
- As a local and federal agency was looking into local accusations of illegal dumping had a spillover effect in which they were being fined for.
- Jenny was worried of the spillover effect that her crazy night of drinking might have but she was too caught up in the moment to have that deter her reckless behavior.
- The spillover effect is when an event in a country has a ripple effect on the economy of another, usually more dependent country.
- Spillover effects can be caused by stock market downturns such as the Great Recession in 2008, or macro events like the Fukushima disaster in 2011.
- Some countries experience a cushion from the spillover effect because they are considered "safe haven" economies, where investors park assets when downturns occur.
- You need to understand how a spillover effect may cause damages and be prepared to deal with them as best you can.
Meaning of Spillover effect & Spillover effect Definition