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Vanessa Gunnella
Economics
- Division
Euro Area External Sector
- Current Position
-
Senior Economist
- Fields of interest
-
International Economics,Other Special Topics
- Education
- 2011-2015
PhD in Economics, Department of Economics, University of Bologna (Italy)
- 23 September 2024
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 6, 2024Details
- Abstract
- Over the past few decades, the euro area has gradually lost market share in global trade. This article describes the long-term trends underlying the decline in the euro area’s market share, relating it to losses in competitiveness in foreign markets. It explains how a series of recent global shocks – such as pandemic-related supply disruptions, geopolitical tensions and the energy shock following Russia’s invasion of Ukraine – as well as other factors affecting price and non-price competitiveness had an asymmetric impact on the euro area compared with its main trading partners and exposed important vulnerabilities in its external competitiveness. These vulnerabilities are particularly significant in view of the challenges ahead, which are linked to the persistence of the energy shock, risks associated with geo-economic fragmentation and the ongoing structural transformation of the European and global economies.
- JEL Code
- F14 : International Economics→Trade→Empirical Studies of Trade
- 3 September 2024
- THE ECB BLOGDetails
- JEL Code
- F13 : International Economics→Trade→Trade Policy, International Trade Organizations
H25 : Public Economics→Taxation, Subsidies, and Revenue→Business Taxes and Subsidies
- 12 July 2023
- THE ECB BLOGDetails
- JEL Code
- F60 : International Economics→Economic Impacts of Globalization→General
F18 : International Economics→Trade→Trade and Environment
- 19 May 2023
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 3, 2023Details
- Abstract
- This box provides empirical evidence on the role of the recent energy price shock in affecting price competitiveness and euro area export performance. At the aggregate level, an analysis based on a structural vector autoregression (SVAR) shows that the chief drivers of export dynamics in the past two years have been shifts in global demand conditions and the effects of supply bottlenecks. The energy supply shock has played a relatively minor role in dampening overall export growth, lowering it by about one percentage point on average over the past year. However, the energy shock may have played a greater role in more exposed sectors, as euro area exports have decreased strongly in high energy-intensive sectors over the past year. Indicators based on relative prices point to a loss of competitiveness for the euro area during 2022. The medium-term outlook for euro area competitiveness may deteriorate further on account of structural changes in energy costs because of the diversification of gas sources and the energy transition, which may lead to higher input costs for euro area exporters compared with their foreign competitors.
- JEL Code
- F1 : International Economics→Trade
- 14 February 2023
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 1, 2023Details
- Abstract
- The box investigates the role of energy prices in the dynamics of euro area industrial production and goods import volumes since autumn 2021, when gas supplies from Russia to the European Union (EU) were curtailed significantly. Despite the sharp rise in energy prices and the uncertainty generated by Russia’s invasion of Ukraine, euro area industrial production has fluctuated without exhibiting a clear trend, while import volumes of goods excluding energy have risen steadily. Several factors, such as adverse energy supply shocks in combination with the easing of supply bottlenecks and a recovery in demand, are behind these developments. There are signs that cheaper imports, particularly of intermediate goods, have acted as substitutes for domestic manufacturing production in more energy-intensive sectors.
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E21 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Consumption, Saving, Wealth
- 10 November 2022
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 7, 2022Details
- Abstract
- Euro area motor vehicle output fell by approximately one-third between June 2018 and July 2022. This can be explained by factors associated with the more stringent emissions tests implemented in the EU, the EU regulation on carbon dioxide emissions, the transition towards electric vehicles, supply chain disruptions, the rise in energy costs and, more recently, the increasing macroeconomic uncertainty related to the war in Ukraine. Euro area car exports also decreased at the same time. The transition to greener motor vehicles and the future evolution of supply bottlenecks are key factors shaping the outlook for euro area car production and exports in the coming years.
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
F10 : International Economics→Trade→General
L62 : Industrial Organization→Industry Studies: Manufacturing→Automobiles, Other Transportation Equipment
- 4 August 2022
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 5, 2022Details
- Abstract
- In the aftermath of Russia’s invasion of Ukraine, war-related disruptions and sanctions led to a sharp decline in trade flows with Russia. This box takes stock of recent and high frequency trade data to track flows of energy and agri-food commodities. It finds that Russia’s oil exports recovered from the post-invasion lows as some diversion of flows from sanctioning countries to Asia took place, whereas pipeline gas and agri-food commodity exports have significantly declined. The box provides an empirical assessment of the effects of the first round of sanctions in March 2022, which are estimated to have reduced Russian imports by about 15%.
- JEL Code
- F13 : International Economics→Trade→Trade Policy, International Trade Organizations
F40 : International Economics→Macroeconomic Aspects of International Trade and Finance→General
B40 : History of Economic Thought, Methodology, and Heterodox Approaches→Economic Methodology→General
- 14 June 2022
- THE INTERNATIONAL ROLE OF THE EURO - BOXThe international role of the euro 2022
- 25 April 2022
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 3, 2022Details
- Abstract
- The recent sharp increase in energy prices has significantly pushed up euro area import prices, resulting in a deterioration in the euro area terms of trade. As the demand for energy is rigid in the short term, this implies a transfer of purchasing power from the euro area to the rest of the world. We estimate a net income loss of 1.3 percentage points of GDP in the last quarter of 2021 as compared with the previous year. This consists in a drop of 3.5 percentage points of GDP due to the rise in energy prices, which is only partly offset by higher euro area export prices. The resulting widening of the deficit in the energy trade balance has reduced the euro area current account balance, and this effect is only partially compensated for by other components.
- JEL Code
- B17 : History of Economic Thought, Methodology, and Heterodox Approaches→History of Economic Thought through 1925
F4 : International Economics→Macroeconomic Aspects of International Trade and Finance
- 15 February 2022
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 1, 2022Details
- Abstract
- This box reviews the dependence of the euro area on natural gas and provides an assessment of the impact of gas price increases and a possible rationing shock on activity. Natural gas is the second most important primary energy resource in the euro area and the most important in the manufacturing sector. More than 90% of the natural gas consumed in the euro area is imported. With indirect use in the early stages of production accounting for more than two-thirds of gas consumption, supply chain linkages significantly amplify the reaction of goods producers and services providers to gas price increases. An accounting framework based on input-output tables shows that the direct and indirect impact of a hypothetical 10% gas rationing shock would reduce euro area gross value added by about 0.7%. Illustrative simulations based on the ongoing surge in oil and gas prices and futures suggest that, by the end of 2022, euro area real GDP may be around 0.2% lower than its counterfactual level, with the effect likely peaking in the first quarter of this year.
- JEL Code
- D45 : Microeconomics→Market Structure and Pricing→Rationing, Licensing
D57 : Microeconomics→General Equilibrium and Disequilibrium→Input?Output Tables and Analysis
Q43 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Energy and the Macroeconomy
- 12 January 2022
- OCCASIONAL PAPER SERIES - No. 289Details
- Abstract
- Global value chains (GVCs) have shaped the dynamics of globalisation in recent years. This paper reviews key concepts and tools to measure countries’ involvement in GVCs, explores recent trends and investigates the underlying drivers of GVC participation empirically. The analysis in the paper finds that in the last decade, GVCs have undergone an important transformation, with participation falling on the back of rising trade costs and the trade integration of some large emerging market economies slowing, while the role of recent technological developments remains unclear. In addition, supply chains appear to have become increasingly regional over time. The paper also offers an insight into the role of production chain linkages in the transmission of recent global shocks across countries, uncovering important amplification effects on trade and activity. Finally, it discusses future prospects for GVCs and global trade, including in the light of developments associated with the coronavirus pandemic.
- JEL Code
- F13 : International Economics→Trade→Trade Policy, International Trade Organizations
F14 : International Economics→Trade→Empirical Studies of Trade
F15 : International Economics→Trade→Economic Integration
F23 : International Economics→International Factor Movements and International Business→Multinational Firms, International Business
F62 : International Economics→Economic Impacts of Globalization→Macroeconomic Impacts
- 12 October 2021
- OCCASIONAL PAPER SERIES - No. 283Details
- Abstract
- The consensus back in 2008 – ten years after the introduction of the euro – was that the adoption of a common currency had made a limited impact of around 2% in total on the trade flows of the first wave of euro area countries (Baldwin et al., 2008). Since then, six more countries have joined the euro area, and firms have internationalised their production processes. These two phenomena are interrelated and may have changed the way the common currency affects the euro area economy. Therefore, with the common currency now into its third decade – and with more countries queuing to adopt it – this paper revisits the trade effects of the euro, focusing on the newer euro adopters (i.e. those countries that have adopted the euro since 2007) and their interaction with the first wave of euro area members via supply chains. The contribution of the paper is twofold. First, it revisits the estimated aggregate impact of the euro on euro area trade, as well as on trade within and between the two waves of adopters. Data on bilateral flows between 1990 and 2015 for an extended sample of countries to estimate a gravity equation indicate a significant trade impact, ranging between 4.3% and 6.3% in total on average, with the magnitude being the highest for exports from the second wave of adopters to the first wave of adopters. If a synthetic control approach (Abadie and Gardeazabal, 2003; Abadie et al., 2010) is used instead, the estimated gains associated with euro adoption are greater. In particular, exports of both intermediate and final products from countries belonging to the first wave of euro adopters to those belonging to the second wave are estimated to have increased by about 30% using this approach. The second contribution made by this paper relates to the channels through which trade might be affected by a currency union. This question is explored by looking separately at trade in intermediate goods and final products. While we find that trade gains were mainly driven by trade in intermediate goods among countries that adopted the currency earlier (5.3%), our results also show that the euro had a positive effect on the exports of final products from the second wave of adopters to other euro area countries. This effect is as high as 10.6% with the gravity model and 32% with the synthetic control approach. One of the reasons for the difference in the range of estimates between the two approaches might be that the gravity model can control for unobserved characteristics via fixed effects, while the synthetic control approach may fail to do so. These results suggest that the euro facilitated the establishment and expansion of international production chains in Europe. In turn, this is likely to have increased business cycle synchronisation in the euro area and to have supported market access for later adopters.
- JEL Code
- F14 : International Economics→Trade→Empirical Studies of Trade
F15 : International Economics→Trade→Economic Integration
- 23 September 2021
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 6, 2021Details
- Abstract
- This box documents recent transport and input-related bottlenecks in global trade and shows how euro area countries have been particularly affected. An empirical analysis assesses the impact of supply bottlenecks on global and euro area export growth and estimates the cumulated shortfall for the level of goods exports to be 6.7% for the euro area and 2.3% for the rest of the world.
- JEL Code
- F10 : International Economics→Trade→General
D24 : Microeconomics→Production and Organizations→Production, Cost, Capital, Capital, Total Factor, and Multifactor Productivity, Capacity
E23 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Production
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
- 21 September 2021
- OCCASIONAL PAPER SERIES - No. 263Details
- Abstract
- This paper assesses how globalisation has shaped the economic environment in which the ECB operates and discusses whether this warrants adjustments to the monetary policy strategy. The paper first looks at how trade and financial integration have evolved since the last strategy review in 2003. It then examines the effects of these developments on global productivity growth, the natural interest rate (r*), inflation trends and monetary transmission. While trade globalisation initially boosted productivity growth, this effect may be waning as trade integration slows and market contestability promotes a winner-takes-all environment. The impact of globalisation on r* has been ambiguous: downward pressures, fuelled by global demand for safe assets and an increase in the propensity to save against a background of rising inequality, are counteracted by upward pressures, from the boost to global productivity associated with greater trade integration. Headline inflation rates have become more synchronised globally, largely because commodity prices are increasingly determined by global factors. Meanwhile, core inflation rates show a lower degree of commonality. Globalisation has made a rather modest contribution to the synchronised fall in trend inflation across countries and contributed only moderately to the reduction in the responsiveness of inflation to changes in activity. Regarding monetary transmission, globalisation has made the role of the exchange rate more complex by introducing new mechanisms through which it affects financial conditions, real activity and price dynamics. Against the background of this discussion, the paper then examines the implications for the ECB’s monetary policy strategy. In doing so, it asks two questions. How is the ECB’s economic and monetary analysis affected by globalisation? And how does globalisation influence the choice of the ECB’s monetary policy objective and instruments? ...
- JEL Code
- E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
F42 : International Economics→Macroeconomic Aspects of International Trade and Finance→International Policy Coordination and Transmission
F44 : International Economics→Macroeconomic Aspects of International Trade and Finance→International Business Cycles
F62 : International Economics→Economic Impacts of Globalization→Macroeconomic Impacts
F65 : International Economics→Economic Impacts of Globalization→Finance
- 24 June 2021
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 4, 2021Details
- Abstract
- This box documents the misalignment between the surge in global demand for semiconductors and their limited global supply. The semiconductor chip shortage poses constraints on euro area manufacturers, particularly in industries relying on semiconductors, such as the computer, electronic, electrical equipment and automotive industries. So far, there is only limited evidence regarding the effects of the shortage of semiconductors on euro area price pressures.
- JEL Code
- F10 : International Economics→Trade→General
D24 : Microeconomics→Production and Organizations→Production, Cost, Capital, Capital, Total Factor, and Multifactor Productivity, Capacity
E23 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Production
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
- 4 January 2021
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 8, 2020Details
- Abstract
- This box assesses the implications of the coronavirus (COVID-19) pandemic for the euro area tourism sector, trade in travel services and consumption of non-residents. Declining mobility during the pandemic has led to a slump in trade in services and tourism. As a result, the drop in non-resident consumption has acted as a shock amplification mechanism in countries exporting tourism services, i.e. countries which receive a lot of tourists, and as a shock absorption mechanism in countries importing tourism services. The partial recovery of tourism services observed during the summer months was mostly generated by domestic tourism substituting foreign tourism. The reintroduction of travel restrictions in October will likely imply that this substitution will continue to affect the dynamics of tourism services. High-frequency data on tourism, travel and services production point to a renewed overall deterioration of tourism services in the final quarter of 2020.
- JEL Code
- E01 : Macroeconomics and Monetary Economics→General→Measurement and Data on National Income and Product Accounts and Wealth, Environmental Accounts
E21 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Consumption, Saving, Wealth
F14 : International Economics→Trade→Empirical Studies of Trade
Z3 : Other Special Topics
- 14 October 2020
- OCCASIONAL PAPER SERIES - No. 249Details
- Abstract
- This paper summarises the economic analyses of the potential impact of Brexit on the United Kingdom, European Union (EU) and euro area performed by members of and contributors to the Brexit Task Force, a group reporting to the International Relations Committee of the European System of Central Banks. The studies were carried out between 2017 and the initial months of 2019 and have been independently published by the authors. The aim of this Occasional Paper is to present the studies in an organic manner, highlighting common features and results.
- JEL Code
- F14 : International Economics→Trade→Empirical Studies of Trade
F15 : International Economics→Trade→Economic Integration
F21 : International Economics→International Factor Movements and International Business→International Investment, Long-Term Capital Movements
F22 : International Economics→International Factor Movements and International Business→International Migration
- 10 January 2020
- WORKING PAPER SERIES - No. 2360Details
- Abstract
- Quantifying the effects of trade policy in the age of ’global value chains’ (GVCs) requires an enhanced analytical framework that takes the observed international input-output relations in due account. However, existing quantitative general equilibrium models generally assume that industry-level bilateral final and intermediate trade shares are identical, and that the allocation of imported inputs across sectors is the same as the allocation of domestic inputs. This amounts to applying two proportionality assumptions, one at the border to split final goods and inputs, and another behind the border to allocate inputs across industries. In practice, neither assumption holds in available input-output data sets. To overcome this limitation of existing models, we consider a richer input-output structure across countries and sectors that we can match with the actual structure reported in input-output tables. This allows us to investigate the relation between the effects of changes in trade policies and GVCs. When we apply the enhanced quantitative general equilibrium model to the assessment of the effects of Brexit, we find trade and welfare losses that are substantially larger than those obtained by previous models. This is due to the close integration of UK-EU production networks and implies that denser GVCs amplify the adverse effects of protectionist trade policies.
- JEL Code
- F13 : International Economics→Trade→Trade Policy, International Trade Organizations
F15 : International Economics→Trade→Economic Integration
F40 : International Economics→Macroeconomic Aspects of International Trade and Finance→General
F60 : International Economics→Economic Impacts of Globalization→General
- 13 June 2019
- OCCASIONAL PAPER SERIES - No. 224Details
- Abstract
- Well-functioning economic structures are key for resilient and prospering euro area economies. The global financial and sovereign debt crises exposed the limited resilience of the euro area’s economic structures. Economic growth was masking underlying weaknesses in several euro area countries. With the inception of the crises, significant efforts have been undertaken by Member States individually and collectively to strengthen resilience of economic structures and the smooth functioning of the euro area. National fiscal policies were consolidated to keep the increase in government debt contained and structural reform momentum increased notably in the second decade, particularly in those countries most hit by the crisis. The strengthened national economic structures were supported by a reformed EU crisis and economic governance framework. However, overall economic structures in euro area countries are still not fully commensurate with the requirements of a monetary union. Moreover, remaining challenges, such as population ageing, low productivity and the implications of digitalisation, will need to be addressed to increase economic resilience and long-term growth.
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
E60 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→General
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
F10 : International Economics→Trade→General
J11 : Labor and Demographic Economics→Demographic Economics→Demographic Trends, Macroeconomic Effects, and Forecasts
O43 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→Institutions and Growth
- 30 April 2019
- OCCASIONAL PAPER SERIES - No. 221Details
- Abstract
- The studies summarised in this paper focus on the economic implications of euro area firms’ participation in global value chains (GVCs). They show how, and to what extent, a large set of economic variables and inter-linkages have been affected by international production sharing. The core conclusion is that GVC participation has major implications for the euro area economy. Consequently, there is a case for making adjustments to standard macroeconomic analysis and forecasting for the euro area, taking due account of data availability and constraints.
- JEL Code
- F6 : International Economics→Economic Impacts of Globalization
F10 : International Economics→Trade→General
F14 : International Economics→Trade→Empirical Studies of Trade
F16 : International Economics→Trade→Trade and Labor Market Interactions
E3 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles
- 24 April 2019
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 3, 2019Details
- Abstract
- The risk of a trade war came sharply into focus in 2018, as protectionist threats by the US Administration and its trading partners were followed by concrete actions. Tensions rose over the summer and, while these have been defused on some fronts, the risk of further escalation remains material. The impact of the measures implemented so far on the global and euro area economic outlooks is expected to remain contained. However, the negative impact could become much greater if trade tensions were to escalate further. Uncertainty related to protectionism is weighing on economic sentiment and it may raise further, potentially eroding confidence and affecting the euro area and the global economy more significantly. The complexity of intertwined international production chains could also magnify the impact. Against this backdrop, this article reviews the changes in the trade policy landscape over the past decade. It discusses the macroeconomic implications of the recent surge in protectionism and evaluates the possible effects that an escalation in trade tensions could have on the global economy and the euro area.
- JEL Code
- F13 : International Economics→Trade→Trade Policy, International Trade Organizations
F14 : International Economics→Trade→Empirical Studies of Trade
- 22 December 2017
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 8, 2017
- 17 May 2017
- WORKING PAPER SERIES - No. 2064Details
- Abstract
- This paper studies the role of global input-output linkages in transmitting economic disturbances in the international economy. Our empirical results suggest that these sectoral spillovers are both statistically significant and of economic importance. We also provide evidence that it is not the interlinkages per se that matter for the international transmission but rather the presence of global hub sectors that are either large suppliers or purchasers of other sectors' inputs. When the links between these sectors and the rest of the global value chain are severed, the spillovers diminish strongly and eventually become statistically insignificant. This highlights the importance of the structure of the network for enabling spillovers and the prominent role played by hub sectors in the global economy.
- JEL Code
- E30 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→General
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
F44 : International Economics→Macroeconomic Aspects of International Trade and Finance→International Business Cycles
F62 : International Economics→Economic Impacts of Globalization→Macroeconomic Impacts
- 2024
- VoxEU
- 2023
- International Economics
- 2022
- VoxEU
- 2021
- Review of International Economics
- 2021
- European Economic Review
- 2018
- VoxEU