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Foreign Value Added along the Consumption Distribution

Author

Listed:
  • Silvia Fabiani

    (Bank of Italy, Directorate General for Economics, Statistics and Research)

  • Alberto Felettigh

    (Bank of Italy, Directorate General for Economics, Statistics and Research)

  • Alfonso Rosolia

    (Bank of Italy, Directorate General for Economics, Statistics and Research)

Abstract

We measure the share of foreign value added embedded in the domestic consumption expenditure of the Italian household sector as a whole and of households along the distribution of consumption expenditure. We find that for each euro spent for consumption by households, almost irrespective of their affluence, about 20 to 40 cents remunerate foreign production factors; around two fifths of this foreign value added originate in other euro-area countries. Because of their heterogeneous bundles, households consume foreign value added through different expenditure items; less affluent ones do so through price-inelastic varieties and necessities.

Suggested Citation

  • Silvia Fabiani & Alberto Felettigh & Alfonso Rosolia, 2023. "Foreign Value Added along the Consumption Distribution," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(1), pages 35-60, March.
    • Handle: RePEc:spr:italej:v:9:y:2023:i:1:d:10.1007_s40797-021-00181-0
    DOI: 10.1007/s40797-021-00181-0
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    More about this item

    Keywords

    Global value chains; Foreign and domestic value added; Distribution of households’ consumption expenditure; Exchange-rate shocks; International policy transmission;
    All these keywords.

    JEL classification:

    • D39 - Microeconomics - - Distribution - - - Other
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions

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