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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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    1. repec:eee:eecrev:v:113:y:2019:i:c:p:77-107 is not listed on IDEAS
    2. Gallegati, Mauro & Giammetti, Raffaele & Russo, Alberto, 2019. "Key sectors in Input-Output Production Networks: an application to Brexit," MPRA Paper 92559, University Library of Munich, Germany.
    3. Garbellini, Nadia, 2014. "International division of labour and countries’ competitiveness: the case of Italy and Germany," MPRA Paper 56542, University Library of Munich, Germany.
    4. repec:bla:worlde:v:41:y:2018:i:8:p:2216-2242 is not listed on IDEAS
    5. 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.

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