Project description

How has the increase in Chinese exports of textile products affected the employment of low skilled workers in German retail trade? What would be the effects of a change in the European Union s agricultural policy on global CO2 emissions?

Economic and environmental policies are designed at a detailed level of industries and products, while production is characterized by an interdependent structure. Due to globalization, these interdependencies cross borders and the inclusion of trade is more than ever essential. Analyzing policy issues therefore requires an all-encompassing database. Its construction is at the heart of this project and the following three aspects are crucial.

Input-output (IO) tables provide a description of the interdependent production structure. Taking the reach of internationalization into full consideration requires a worldwide set of national IO tables (covering at least 80% of world GDP) that are fully linked through bilateral trade data. Taking the dynamics of internationalization into account requires a time series (1995-2006) of such linked IO tables, in current and constant international prices. Taking the effects of internationalization into consideration requires that other relevant information is appended.

These so-called satellite accounts include labor data for different skill types, investment flows, and environmental and resources data. The first part of the project constructs such a unique database. The second part of the project applies the database to analyze the international interaction of socio-economic and environmental objectives from a policy perspective. These are applications that use the database by directly employing IO and econometric techniques, and applications that use large-scale models that employ the database.

The project builds on several previous, EU-sponsored projects and is carried out by Europe s leading experts in IO theory, data construction, interindustry models, and policy application.