Inaugural lecture: Interdependence and international trade: an input-output analysis

Date and time : 10 June 2008, 16h15
Place : Academiegebouw, Broerstraat 5, Groningen

In his inaugural lecture, Prof.dr. Erik Dietzenbacher, professor in Interindustry Economics at the Faculty of Economics and Business, will discuss two studies that describe the effects of globalization: water trade in Adalusia and CO₂ trade in India.

The distinctive feature of the discipline interindustry economics is that the economy is split up into hundreds of industry sectors and that production is characterized by interdependencies, or mutual dependencies between industry sectors. An important effect of globalization is that such interdependencies do not stop at national borders.

‘Water export’ from dry Andalusia

Dietzenbacher’s inaugural lecture discusses a study about water trade in Andalusia. Although one of the driest regions in Europe, Andalusia exports a substantial amount of water, for example through food export. The agricultural goods necessary for the production of foods are produced in an extremely water-intensive way. 1 Euro worth of oranges in the supermarket has required 3000 litres of water. The study in question calculates that stopping a small part of the export will lead to a considerable decrease in the total water consumption, which would solve the problems resulting from water shortage.

India not a ‘pollution haven’

The second study that Dietzenbacher refers to is the CO₂ trade in India. Many environmental economists hold the opinion that rich countries increasingly choose to leave production leading to high levels of emission to developing countries, the so-called ‘pollution havens’, which then export the goods to the rich countries. In return, the developing countries import goods that are produced in a ‘clean’ way in rich countries. It is surprising to see that the calculations in the study show that India is not such a haven for polluting production. India’s export appears to be approximately twice as clean as its import.

Research centre input-output analysis

The University of Groningen accommodates one of the most prominent research centres in the field of input-output analysis (the method often used in interindustry economics) in the world. Recently, the European Commission decided positively on an application for subsidy for an international cooperation project with the aim of constructing a mega-database for carrying out all kinds of new input-output studies.

For more information: prof.dr. H.W.A. Dietzenbacher

See also: 22-05-07 Erik Dietzenbacher professor Interindustry Economics