IDEAS home Printed from https://ideas.repec.org/b/wfo/wstudy/47500.html
   My bibliography  Save this book

A Global Value Chain Analysis of Macroeconomic Imbalances in Europe. WWWforEurope Working Paper No. 67

Author

Listed:
  • Stefan Ederer
  • Peter Reschenhofer

Abstract

This paper assesses whether or to what extent the macroeconomic imbalances, which emerged in the "North" and "South" of the European Monetary Union before the financial and economic crisis of 2008-09, are symmetric. Firstly, we calculate bilateral exports and imports between all EU member countries, applying the concept of "trade in value added", and discuss their role in the emergence of trade surpluses and deficits. Secondly, we decompose the changes in the trade balances into the effects of shifts in final demand on the one side and changes in the global production patterns on the other. Thirdly, we quantify to what extent an increase in domestic demand in the North and a decrease in the South would support the elimination of these imbalances. Finally, we calculate a hypothetical scenario in which final demand would expand similarly in all EMU countries. Thereby we evaluate how the macroeconomic imbalances would have evolved in the case of more balanced demand developments in the EMU in the past, as well as how adjustment could possibly happen in the future.

Suggested Citation

  • Stefan Ederer & Peter Reschenhofer, 2014. "A Global Value Chain Analysis of Macroeconomic Imbalances in Europe. WWWforEurope Working Paper No. 67," WIFO Studies, WIFO, number 47500, April.
    • Handle: RePEc:wfo:wstudy:47500
    as

    Download full text from publisher

    File URL: https://www.wifo.ac.at/wwa/pubid/47500
    File Function: abstract
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Erik Dietzenbacher & Bart Los, 2000. "Structural Decomposition Analyses with Dependent Determinants," Economic Systems Research, Taylor & Francis Journals, vol. 12(4), pages 497-514.
    2. Karl Aiginger, 2014. "Industrial Policy for a Sustainable Growth Path. WWWforEurope Policy Paper No. 13," WIFO Studies, WIFO, number 47261, April.
    3. Marcel P. Timmer & Bart Los & Robert Stehrer & Gaaitzen J. de Vries, 2013. "Fragmentation, incomes and jobs: an analysis of European competitiveness [Who captures value in global supply chains?]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 28(76), pages 613-661.
    4. Marcel Timmer & Abdul A. Erumban & Reitze Gouma & Bart Los & Umed Temurshoev & Gaaitzen J. de Vries & I–aki Arto & Valeria Andreoni AurŽlien Genty & Frederik Neuwahl & JosŽ M. Rueda?Cantuche & Joseph , 2012. "The World Input-Output Database (WIOD): Contents, Sources and Methods," IIDE Discussion Papers 20120401, Institue for International and Development Economics.
    5. Arne J. Nagengast & Robert Stehrer, 2016. "Accounting for the Differences Between Gross and Value Added Trade Balances," The World Economy, Wiley Blackwell, vol. 39(9), pages 1276-1306, September.
    6. Stefan Ederer & Peter Reschenhofer, 2013. "Macroeconomic Imbalances in the EU. WWWforEurope Working Paper No. 42," WIFO Studies, WIFO, number 47017, April.
    7. Dietzenbacher,Erik & Lahr,Michael L. (ed.), 2008. "Wassily Leontief and Input-Output Economics," Cambridge Books, Cambridge University Press, number 9780521049436, October.
    8. Baldwin, Richard, 2012. "Trade and industrialisation after globalisation?s 2nd unbundling: How building and joining a supply chain are different and why," CEPR Discussion Papers 8768, C.E.P.R. Discussion Papers.
    9. Robert Stehrer, 2012. "Trade in Value Added and the Valued Added in Trade," wiiw Working Papers 81, The Vienna Institute for International Economic Studies, wiiw.
    10. Richard Baldwin & Javier Lopez-Gonzalez, 2015. "Supply-chain Trade: A Portrait of Global Patterns and Several Testable Hypotheses," The World Economy, Wiley Blackwell, vol. 38(11), pages 1682-1721, November.
    11. Foster-McGregor, Neil & Stehrer, Robert, 2013. "Value added content of trade: A comprehensive approach," Economics Letters, Elsevier, vol. 120(2), pages 354-357.
    12. Marcel P. Timmer & Abdul Azeez Erumban & Bart Los & Robert Stehrer & Gaaitzen J. de Vries, 2014. "Slicing Up Global Value Chains," Journal of Economic Perspectives, American Economic Association, vol. 28(2), pages 99-118, Spring.
    13. repec:dgr:rugggd:gd-135 is not listed on IDEAS
    14. Karl Aiginger, 2014. "Industrial Policy for a Sustainable Growth Path," WIFO Working Papers 469, WIFO.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ederer, Stefan & Reschenhofer, Peter, 2018. "Macroeconomic imbalances and structural change in the EMU," Structural Change and Economic Dynamics, Elsevier, vol. 46(C), pages 59-69.
    2. Stefan Ederer & Peter Reschenhofer, 2014. "Macroeconomic Imbalances and Structural Change in the EMU. WWWforEurope Working Paper No. 69," WIFO Studies, WIFO, number 47506, April.
    3. Stefan Ederer, 2015. "Macroeconomic Imbalances and Institutional Reforms in the EMU. WWWforEurope Working Paper No. 87," WIFO Studies, WIFO, number 57896, April.
    4. Ďurčová, Júlia & Mirdala, Rajmund, 2016. "Offshoring Intensities and Skill Upgrading of Employment in the Slovak Republic," MPRA Paper 79921, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stefan Ederer & Peter Reschenhofer, 2016. "Growth Patterns and Trade Imbalances in the EMU. A Global Value Chain Analysis," WIFO Working Papers 509, WIFO.
    2. Kozo Kiyota & Keita Oikawa & Katsuhiro Yoshioka, 2017. "The Global Value Chain and the Competitiveness of Asian Countries," Asian Economic Papers, MIT Press, vol. 16(3), pages 257-281, Fall.
    3. Auer, Raphael A. & Mehrotra, Aaron, 2014. "Trade linkages and the globalisation of inflation in Asia and the Pacific," Journal of International Money and Finance, Elsevier, vol. 49(PA), pages 129-151.
    4. Victor Kummritz, 2015. "Global Value Chains: Benefiting the Domestic Economy?," IHEID Working Papers 02-2015, Economics Section, The Graduate Institute of International Studies.
    5. João Amador & Sónia Cabral, 2017. "Networks of Value-added Trade," The World Economy, Wiley Blackwell, vol. 40(7), pages 1291-1313, July.
    6. Arne J. Nagengast & Robert Stehrer, 2016. "The Great Collapse in Value Added Trade," Review of International Economics, Wiley Blackwell, vol. 24(2), pages 392-421, May.
    7. Nenci, Silvia & Fusacchia, Ilaria & Giunta, Anna & Montalbano, Pierluigi & Pietrobelli, Carlo, 2022. "Mapping global value chain participation and positioning in agriculture and food: stylised facts, empirical evidence and critical issues," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 11(2), July.
    8. João Amador & Rita Cappariello & Robert Stehrer, 2015. "Global Value Chains: A View from the Euro Area," Asian Economic Journal, East Asian Economic Association, vol. 29(2), pages 99-120, June.
    9. João Amador & Sónia Cabral, 2014. "Global Value Chains: Surveying Drivers, Measures and Impacts," Working Papers w201403, Banco de Portugal, Economics and Research Department.
    10. Michael Peneder & Gerhard Streicher, 2016. "De- versus Re-industrialisation: Is Structural Change Reversible?," WIFO Working Papers 506, WIFO.
    11. Stefan Ederer & Peter Reschenhofer, 2014. "Macroeconomic Imbalances and Structural Change in the EMU. WWWforEurope Working Paper No. 69," WIFO Studies, WIFO, number 47506, April.
    12. Amador, João & Cabral, Sónia, 2014. "Global value chains: surveying drivers and measures," Working Paper Series 1739, European Central Bank.
    13. Bart Los & Marcel P. Timmer & Gaaitzen J. Vries, 2015. "How Global Are Global Value Chains? A New Approach To Measure International Fragmentation," Journal of Regional Science, Wiley Blackwell, vol. 55(1), pages 66-92, January.
    14. Felice, Giulia & Tajoli, Lucia, 2021. "Trade balances and global value chains: Is there a link?," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 228-246.
    15. Arne J. Nagengast & Robert Stehrer, 2016. "Accounting for the Differences Between Gross and Value Added Trade Balances," The World Economy, Wiley Blackwell, vol. 39(9), pages 1276-1306, September.
    16. Inaki Arto & Erik Dietzenbacher & Jose Manuel Rueda-Cantuche, 2019. "Measuring bilateral trade in terms of value added," JRC Research Reports JRC116694, Joint Research Centre.
    17. Rotunno, Lorenzo & Wood, Adrian, 2020. "Wage inequality and skill supplies in a globalised world," Journal of Comparative Economics, Elsevier, vol. 48(3), pages 529-547.
    18. Fertö, I., 2018. "Global Agri-food Trade Competitiveness: Gross Versus Value Added Exports," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 10(4), December.
    19. Zhao, Yuhuan & Liu, Ya & Qiao, Xiaoyong & Wang, Song & Zhang, Zhonghua & Zhang, Yongfeng & Li, Hao, 2018. "Tracing value added in gross exports of China: Comparison with the USA, Japan, Korea, and India based on generalized LMDI," China Economic Review, Elsevier, vol. 49(C), pages 24-44.
    20. Duan, Yuwan & Yan, Bingqian, 2019. "Economic gains and environmental losses from international trade: A decomposition of pollution intensity in China's value-added trade," Energy Economics, Elsevier, vol. 83(C), pages 540-554.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wfo:wstudy:47500. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Florian Mayr (email available below). General contact details of provider: https://edirc.repec.org/data/wifooat.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.