The coincidence of sectoral slowdowns in the UK: comparing transmission probabilities and economic linkages

Eva Janssens, Robin L. Lumsdaine*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

This paper studies spillovers across macroeconomic sectors in the UK, using data from the Bank of England's Flow of Funds statistics. We combine two different approaches to quantify the spread of economic deterioration to assess whether sectors with large bilateral economic linkages as measured through network data have a greater statistical likelihood of spillovers between them. The combination of both approaches reveals the Monetary Financial Institutions sector's role as shock absorber, and identifies the most important channels of spillovers. The inferential discrepancies between network data and statistical spillovers highlight the contribution of the proposed methodology.
Original languageEnglish
JournalJournal of Applied Econometrics
Publication statusAccepted for publication - 21 Jan 2021

Keywords

  • Flow of Funds
  • contagion
  • epidemiology
  • intersectoral networks
  • Gibbs sampling
  • Bayesian priors

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