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Domestic demand and global production in the Eurozone: A multi-regional input-output assessment of the global crisis

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  • Nadia Garbellini
  • Enrico Marelli
  • Ariel Luis Wirkierman

Abstract

This paper studies the effects of domestic and foreign demand impulses in euro area economies following the Great Recession of 2008--2009 and the Eurozone crisis of 2011--2012. Using a global Input--Output framework we apply a set of metrics to assess spillover effects of international trade in intermediates triggered by the dynamics of final demand. Our findings suggest that while cross-country trade spillovers have played a crucial role during the Great Recession, they have had a moderate impact when compared with the role of domestic sources of final demand during the Eurozone crisis. Hence, a strategy of coordinated fiscal austerity cannot be sustained by empirical evidence.

Suggested Citation

  • Nadia Garbellini & Enrico Marelli & Ariel Luis Wirkierman, 2014. "Domestic demand and global production in the Eurozone: A multi-regional input-output assessment of the global crisis," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(3), pages 336-364, May.
    • Handle: RePEc:taf:irapec:v:28:y:2014:i:3:p:336-364
    DOI: 10.1080/02692171.2013.872086
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    References listed on IDEAS

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    Cited by:

    1. Garbellini, Nadia, 2014. "International division of labour and countries’ competitiveness: the case of Italy and Germany," MPRA Paper 56542, University Library of Munich, Germany.
    2. Filippo Bontadini & Rinaldo Evangelista & Valentina Meliciani & Maria Savona, 2021. "Asymmetries in Global Value Chain Integration, Technology and Employment Structures in Europe: Country and Sectoral Evidence," CESifo Working Paper Series 9438, CESifo.
    3. Joya, Omar & Rougier, Eric, 2019. "Do (all) sectoral shocks lead to aggregate volatility? Empirics from a production network perspective," European Economic Review, Elsevier, vol. 113(C), pages 77-107.
    4. Davide Villani & Marta Fana, 2021. "Productive integration, economic recession and employment in Europe: an assessment based on vertically integrated sectors," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 48(2), pages 137-157, June.
    5. 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.
    6. Emanuele De Meo & Giacomo Tizzanini, 2021. "GDP‐network CoVaR: A tool for assessing growth‐at‐risk," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 50(2), July.
    7. Oliver Picek & Enno Schröder, 2018. "Spillover effects of Germany's final demand on Southern Europe," The World Economy, Wiley Blackwell, vol. 41(8), pages 2216-2242, August.
    8. Sergio Cesaratto & Gennaro Zezza, 2018. "What went wrong with Italy, and what the country should now fight for in Europe," FMM Working Paper 37-2018, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.

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