The propagation of business sentiment within the European Union

Publikation: Working/Discussion PaperWU Working Paper

29 Downloads (Pure)

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.
OriginalspracheEnglisch
ErscheinungsortVienna
HerausgeberWU Vienna University of Economics and Business
PublikationsstatusVeröffentlicht - 2018

Publikationsreihe

ReiheDepartment of Economics Working Paper Series
Nummer257

WU Working Paper Reihe

  • Department of Economics Working Paper Series

Zitat