North-South interdependency and the shock transmission mechanism Objectives

Author/s Luca Cherubini, Leonardo Ghezzi, Renato Paniccià, Stefano Rosignoli
Publishing Year 2012 Issue 2012/1 Language Italian
Pages 45 P. 42-86 File size 1102 KB
DOI 10.3280/REST2012-001003
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In this paper the economic interdependencies and trade flows amongst the main areas of the country have been analyzed over the period 1995-2006. Methods and Results The analysis has been performed through a Multi-Regional Input Output model. The results show that significant spill-over effects from the Southern regions towards the rest of Italy and foreign countries are generated by the domestic demand localized in the "Mezzogiorno": in the year 2006 an increase of 100 euros of the domestic demand in the South triggered a total increase of production amounting to 169 euros, but only 97 on behalf of the area itself and 52 in the rest of Italy; the same increase in the North-West triggered production for a total of 172 euro, 114 of which in local production and about 35 on behalf of the other areas of the country. The domestic final demand produces in the Southern regions a negative interregional balance, while in the North-West it generates an interregional trade surplus. The lower openness to international trade of the Southern and Central regions makes them more resilient to foreign demand negative shocks. Conclusions The dependence of the Southern economy from the Centre-North supply has not shown significant changes over the period examined: while the North-East and the Centre have gradually increased their own interdependence with the most developed area of the country, the "Mezzogiorno" has not achieved significant improvements in this direction.

Keywords: Multi regional Input-Output model, Input-Output analysis, gravity models, regional economics, interregional trade, demand shocks, "Mezzogiorno" question.

Luca Cherubini, Leonardo Ghezzi, Renato Paniccià, Stefano Rosignoli, L’interscambio commerciale tra il mezzogiorno e il centro nord: struttura e meccanismi di propagazione degli shock in "RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO" 1/2012, pp 42-86, DOI: 10.3280/REST2012-001003