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Key sectors in input–output production networks: An application to Brexit

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  • Raffaele Giammetti
  • Alberto Russo
  • Mauro Gallegati

Abstract

This paper presents the first detailed and holistic description of the European production network (EPN) and provides different rankings of the most "systemically important" industries involved in Brexit. Employing techniques of complex networks analysis and input–output traditional tools, the study identifies those industries that are key in the complex structure of the UK‐EU trade relationships. The method developed would help policymakers to better understand which tariff would have a more distortive impact, which export sector should be pushed, which imports should be safeguarded. Such information may have foremost importance in the negotiations between the UK and EU. Our findings suggest that Brexit would be not just a problem for the UK, as it is often portrayed, but any form of Brexit could propagate affecting the global production system.

Suggested Citation

  • Raffaele Giammetti & Alberto Russo & Mauro Gallegati, 2020. "Key sectors in input–output production networks: An application to Brexit," The World Economy, Wiley Blackwell, vol. 43(4), pages 840-870, April.
  • Handle: RePEc:bla:worlde:v:43:y:2020:i:4:p:840-870
    DOI: 10.1111/twec.12920
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    3. Raffaele Giammetti & Luca Papi & Désirée Teobaldelli & Davide Ticchi, 0. "The Italian value chain in the pandemic: the input–output impact of Covid-19 lockdown," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 0, pages 1-15.
    4. Leonie Wenz & Anders Levermann & Sven Norman Willner & Christian Otto & Kilian Kuhla, 2020. "Post-Brexit no-trade-deal scenario: Short-term consumer benefit at the expense of long-term economic development," PLOS ONE, Public Library of Science, vol. 15(9), pages 1-14, September.

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    More about this item

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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