Autarchy Along the Distribution

29 Pages Posted: 10 Dec 2020

Date Written: November 13, 2020

Abstract

We measure the share of foreign value added embedded in the domestic consumption expenditure of the Italian household sector as a whole and of households along the distribution of consumption expenditure. We find that for each euro spent for consumption by households, almost irrespective of their affluence, about 20 to 40 cents remunerate foreign production factors; around two fifths of this foreign value added originate in other euro-area countries. Because of their heterogeneous bundles, households consume foreign value added through different expenditure items; less affluent ones do so through price-inelastic varieties and necessities.

Keywords: global value chains, foreign and domestic value added, distribution of households’ consumption expenditure, exchange-rate shocks, international policy transmission

JEL Classification: D39, E21, F42, F45

Suggested Citation

Fabiani, Silvia and Felettigh, Alberto and Rosolia, Alfonso, Autarchy Along the Distribution (November 13, 2020). Bank of Italy Occasional Paper No. 580, Available at SSRN: https://ssrn.com/abstract=3746177 or http://dx.doi.org/10.2139/ssrn.3746177

Silvia Fabiani

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Alberto Felettigh (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Alfonso Rosolia

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy
0039 06 4792 3077 (Phone)

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