Cross-border investment expenditure spillovers in European gas infrastructure

This work is part of the EDGaR project ‘Operating the gas transmission system: institutional design challenges and solutions’. This research has been financed by the Energy Delta Gas Research (EDGaR) program. EDGaR is co-financed by the Northern Netherlands Provinces, the European Fund for Regional Development, the Ministry of Economic Affairs, Agriculture and Innovation and the Province of Groningen.We investigate the implications of an integrated vis-à-vis a national perspective regarding investment in natural gas infrastructure. In particular, we analyze cross-border spillovers related to the investment expenditure of five Western European countries. We develop a practical approach to estimate such cross-border investment expenditure spillovers using a multi-regional input-output model. We find that international spillovers are generally larger for employment compensation compared to capital compensation and that the spillovers are unevenly distributed among the countries and the types of labor. Both high-skilled and medium-skilled labor is impacted most in the country where the investments take place, whereas low-skilled labor is mostly generated outside the EU. We argue that an integrated European gas infrastructure investment policy is to be recommended.Publisher PDFPeer reviewe

Rents, resources, and multiple technologies; Ricardian mechanisms in input-output modelling

To allow for ‘multiple technologies’ to produce a homogeneous output in input–output models, Duchin and Levine [(2011) Sectors may use Multiple Technologies Simultaneously: The Rectangular Choice-of-technology Model with Binding Factor Constraints, Economic Systems Research, 23(3), 281–302] propose an optimization model constrained by primary resources. We show that the Duchin–Levine model contains two different mechanisms by which multiple technologies can arise. If a factor in short supply is shared by the original and the newly entering technology, the output of the original, lower-cost technology will be reduced to make room for the higher-cost technology which is less intensive in that factor. In contrast, if the factor in short supply is technology-specific, a higher-cost technology supplements the original lowest-cost one, which stays fully active. Either mechanism implies a mechanism-specific set of prices, quantities and rents. We relate these results to classical views on comparative advantage, fixed output levels and the origin of rents

Economics and Environment – Modeling Global Linkages

Om internationale productieketens en de bijbehorende milieueffecten te analyseren zijn internationale multisectorale databases nodig. Dit proefschrift presenteert een methodologie voor het construeren van internationale aanbods- en gebruikstabellen en geconsolideerde supranationale aanbods- en gebruikstabellen die intern consistent en juist geprijsd zijn. Voor beide tabeltypes wordt er onderzocht in hoe verre het gebruik van deze tabellen de schattingen van de effecten verbetert ten opzichte van de resultaten die verkregen worden met meer simplistische modellen of op basis van meer geaggregeerde data. De verschillen blijken substantieel te zijn. Om het belang van internationale relaties te benadrukken wordt de internationale aanbods- en gebruikstabel ook gebruikt om te analyseren wat de import afhankelijkheid is van landen met betrekking tot ruwe materialen. De afhankelijkheid van landen van de toevoer van ruwe materialen vanuit een groep snelgroeiende economieën zou voor problemen kunnen zorgen in de toekomst

The Average Propagation Length:Conflicting Macro, Intra-industry, and Interindustry Conclusions

<p>The average propagation length (APL) has been proposed as a measure of the fragmentation and sophistication of an economy. For a one-sector economy, we show that the APL is strictly proportional to the macro multiplier of that economy. The same holds for strong intra-industry linkages. Hence, for comparing economies and comparing single industries, the concept of the APL is of no value. For pure interindustry linkages, however, we find that the length of the supply chain between two different industries is negatively related to the strength of the multiplier between those two industries, be it weakly. Hence, the APL should only be used to compare pure interindustry linkages.</p>

The impact of production and infrastructure shocks:A non-linear input-output programming approach, tested on an hypothetical economy

This paper develops a methodology to predict the wider interregional and interindustry economic impacts of major catastrophes, such as earthquakes and tsunamis. Short-run impacts are determined by the attempts of economic actors to continue their familiar activities and established trade patterns, as closely as possible. We propose to model these behavioural reactions by minimizing the information gain between the pre- and the post-catastrophe pattern of economic transactions in the economy at hand. The basic non-linear program reproduces the short-run equilibrium described by the base year interregional input-output table (IRIOT) of a hypothetical open, two regions, two industries economy. The proposed methodology is further tested by means of a comparison of the base scenario with two scenarios with regional production shocks and two scenarios with interregional infrastructure shocks. We conclude that the outcomes are reasonable and become more plausible when the positive foreign trade balance limitation is dropped.

A new SUT consolidation method tested by a decomposition of value added and CO2 embodied in EU27 exports

This paper develops a method to consolidate national supply–use tables (SUTs) into a single supra-regional SUT. The method deals with mirror trade statistics problems, such as the different valuation of imports and exports, and it corrects for double-counting re-exports. The method is tested by means of a decomposition of value added and CO2 emissions embodied in EU27 exports to third countries. When the national SUTs for the period 2000– 2007 are used, neglecting intra-European Union spillover and feedback effects results in an nderestimation of the embodied value added of 12–15%. Not consolidating the national tables properly leads to a further underestimation of 11–16%.With these underestimations removed, EU27 foreign exports still only explain around 11% of EU27 Gross Domestic Product, whereas they explain 17% of the EU27 CO2 emissions. Hence, the income benefits of these exports are, in relative terms, considerably smaller than their CO2 emission cost.JRC.J.5-Sustainable Production and Consumptio

A NOTE ON THE GRAS METHOD

<p>The GRAS method as presented by Junius and Oosterhaven [Junius, T. and J. Oosterhaven (2003) The Solution of Updating or Regionalizing a Matrix with Both Positive and Negative Elements. Economic Systems Research, 15, 87-96] assumes that every row and every column of a matrix to be balanced has at least one positive element. This might not necessarily be true in practice, in particular, when dealing with large-scale input-ouput tables, supply and use tables, social accounting matrices, or, for that matter, any other matrix. In this short note we relax this assumption and make available our MATLAB program for anyone interested in matrix GRASing. The same issue arises in the presentations of the KRAS method [Lenzen, M., B. Gallego and R. Wood (2009) Matrix Balancing Under Conflicting Information. Economic Systems Research, 21, 23-44] and the SUT-RAS method [Temurshoev, U. and M.P. Timmer (2011) Joint Estimation of Supply and Use Tables. Papers in Regional Science, 90, 863-882], which should be accordingly accounted for in their empirical applications.</p>

Measuring the EU value added embodied in EU foreign exports by consolidating 27 national supply and use tables for 2000-2007

This paper develops a method to consolidate national supply-use tables (SUTs) into a single supra-regional SUT. The method deals with mirror trade statistics problems, such as the different valuation of imports and exports, and it corrects for the double-counting of re-exports. To test the contribution of the various construction steps, the paper decomposes the EU value added that is embodied in the EU exports to third countries into seven components. When the national SUTs for the period 2000-2007 are used, neglecting intra-EU spillover and feedback effects between the 27 EU-members results in an underestimation of the embodied value added of 12-15%. Not consolidating the national tables leads to a further under-estimation of 11-16%. Both types of errors are substantial. With these underestimations removed, the exports to third countries still only explain around 11% of the EU27 GDP.JRC.J.5-Sustainable Production and Consumptio