Key Sectors in Input-Output Production Networks: An Application to Brexit

39 Pages Posted: 8 Mar 2019

See all articles by Mauro Gallegati

Mauro Gallegati

Università Politecnica delle Marche - Faculty of Economics

Raffaele Giammetti

Università Politecnica delle Marche - Department of Economics and Social Sciences

Alberto Russo

Università Politecnica delle Marche, Ancona - Department of Management

Date Written: March 6, 2019

Abstract

This paper presents the first detailed and holistic description of the European production network (EPN) and provides different rankings of the most 'systemically important' industries involved in Brexit. Employing techniques of complex networks analysis and Input-Output traditional tools, the study identifies those industries that are key in the complex structure of the UK-EU trade relationships. The method developed would help policy-makers to better understand which tariff would have a more distortive impact, which export sector should be pushed, which imports should be safeguarded. Such information may have foremost importance in the negotiations between the UK and EU. Our findings suggest that Brexit would be not just a problem for the UK, as it is often portrayed, but any form of Brexit could propagate affecting the global production system. Further, by inspecting industries centrality within the EPN, we find that the UK could be less exposed to trade barriers than EU countries.

Keywords: Brexit, trade barriers, tariffs, key sector, centrality measures, input-output analysis, production networks, value chains

JEL Classification: C67, F13, F14, R11

Suggested Citation

Gallegati, Mauro and Giammetti, Raffaele and Russo, Alberto, Key Sectors in Input-Output Production Networks: An Application to Brexit (March 6, 2019). Available at SSRN: https://ssrn.com/abstract=3347545 or http://dx.doi.org/10.2139/ssrn.3347545

Mauro Gallegati

Università Politecnica delle Marche - Faculty of Economics ( email )

Piazzale Martelli, 8
60121 Ancona
Italy
++390712207188 (Phone)
++390712207102 (Fax)

Raffaele Giammetti (Contact Author)

Università Politecnica delle Marche - Department of Economics and Social Sciences ( email )

Piazzale Martelli, 8
Ancona, 60121
Italy

Alberto Russo

Università Politecnica delle Marche, Ancona - Department of Management ( email )

Piazzale Martelli, 8
60121 Ancona
Italy

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