Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/179303
Authors: 
Kukuvec, Anja
Oberhofer, Harald
Year of Publication: 
2018
Series/Report no.: 
WIFO Working Papers 549
Abstract: 
This paper empirically investigates the propagation of business sentiment within the 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 data and information on indirect wage costs. Econometrically, we model interdependencies in economic activities via input-output 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 labour 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.
Subjects: 
Business sentiment
propagation
economic fluctuations
input-output linkages
networks
space-time model
policy reforms
JEL: 
C33
D84
E32
J32
L14
Document Type: 
Working Paper
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