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The propagation of business sentiment within the European Union

Anja Kukuvec () and Harald Oberhofer ()

Department of Economics Working Paper Series from WU Vienna University of Economics and Business

Abstract: 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)
New Economics Papers: this item is included in nep-mac
Date: 2018
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https://epub.wu.ac.at/6003/ original version (application/pdf)

Related works:
Working Paper: The Propagation of Business Sentiment within the European Union? (2018) Downloads
Working Paper: The propagation of business sentiment within the European Union (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:wiw:wus005:6003

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