The propagation of business sentiment within the European Union
Anja Kukuvec () and
Harald Oberhofer ()
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Anja Kukuvec: Department of Economics, Vienna University of Economics and Business
Department of Economics Working Papers from Vienna University of Economics and Business, Department of Economics
This paper empirically investigates the propagation of business sentiment within the European Union (EU) and adds to the literature on shock absorption via a common market's real economy. To this end, we combine EU-wide official business sentiment indicators with world input-output (IO) data and information on indirect wage costs. Econometrically, we model interdependencies in economic activities via IO-linkages and apply space-time models. The resulting evidence provides indication for the existence of substantial spillovers in business sentiment formation. Accordingly, and highlighted by the estimated impacts of changes in indirect labor costs, policy reforms aiming at increasing the resilience of the European single market need to take these spillovers into account in order to increase its effectiveness.
Keywords: Business sentiment; propagation; economic fluctuations; input-output linkages; networks; space-time model; policy reforms (search for similar items in EconPapers)
JEL-codes: C33 D84 E32 J32 L14 (search for similar items in EconPapers)
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Working Paper: The Propagation of Business Sentiment within the European Union? (2018)
Working Paper: The propagation of business sentiment within the European Union (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:wiw:wiwwuw:wuwp257
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